LINC SCOTLAND

1
(No Transcript)
2
So why did we have to invent LINC? Market
failure banks venture capitalists
business birth-rate educating entrepreneurs
training investors
3
HOW IS LINC FUNDED? government economic
agency ERDF Scottish clearing banks
private sector cash and in-kind repayment of
investment readiness grants
shareholding Annual turnover - 600,000
4
Business Angels

• ...more than just money

5
WHAT IS INFORMAL INVESTMENT?

• Direct investment in unquoted companies by
  private individuals.
• Funding usually in the Equity Gap i.e. 20,000
  to 500,000.
• Larger sums from syndicates or Superangels

6
CONTRIBUTION TO GROWTH

• Reduced financial burden in early stages.
• Increased credibility and leverage, - typically
  41
• Access to additional management skills.

7
ARCHANGELS Over 50K to invest per case Serial
investors Limited hands on management Wide range
companies including start-up Often pull
syndicates together
8
NCOME SEEKING Less wealthy More risk
averse Invest 25K-50k Seeking full time
employment Like syndicates Invest close to home
INCOME SEEKING
9
ENTREPRENEURIAL/WEALTH MAXIMISING Invest
50k-100K or more Significant hands-on
management role Net worth of up to 500K Invest
in known sectors/areas of expertise
10
VIRGIN INVESTORS Represent significant
potential Difficulties in finding
opportunities Prefer to be co-investors Need
professional support Invest closer to home
11

• Independent not-for-profit business introduction
  service.
• Clearing house for information on investment
  opportunities and Investors requirements.
• Facilitators, NOT investment advisors.

12
MAKING THE CONNECTION

• Monthly Bulletin of investment opportunities
• Database of Investor profiles and preferences
• Monthly Investor Meetings
• Personal networking
• Investment Readiness grants
• Supporting investor syndicates

13
Some recent deals

• 25,000 for specialist engineering (200k)
• 20,000 for computer services (220k)
• 55,000 for biometrics
• 80,000 for publishing (500k)
• 250,000 for manufacturing (2.5M)
• 45,000 for software services (165k)
• 100,000 for optoelectronics (153k)
• 250,00 for leisure/ entertainment (975k)
• 730,000 for business acquisition
• 250,000 for computer related in (410k)

14

• CHARACTERISTICS OF ANGEL DEALS
• Angels invest close to home
• Due diligence takes av. 3.5 months
• Will need 3-4 further financing rounds
• 6 years to an exit

15
INVESTMENT OUTCOMES

• 40 of investments result in total loss
• 22 result in returns between 1 and 20
• 38 result in returns above 20
• 10 in 100 proposals worthwhile

16
Business Angel Survey Headlines
Factors influencing investment decision None
Little Some Great EIS 16 15
47 22
17
Business Angel Survey Headlines
Factors influencing investment decision None
Little Some Great EIS 16 15
47 22 Sector 7 15 39 39
18
Business Angel Survey Headlines
Factors influencing investment decision None
Little Some Great EIS 16 15
47 22 Sector 7 15 39 39 Adviser
16 44 38 2 Aquaintances 12 26 55
7 Business Plan 2 20 48 30
19
Business Angel Survey Headlines
Factors influencing investment decision None
Little Some Great EIS 16 15
47 22 Sector 7 15 39 39 Adviser
16 44 38 2 Aquaintances 12 26 55
7 Business Plan 2 20 48
30 Entrepreneur 0 4 7 89
20
Entrepreneurial firms, i.e. those seeking
external equity financing for growth, make up
only around 4 of current start-ups,
but

• In ten years time they will provide about 50 of
  the employment of those firms remaining.

21
A Business Angel Network Could this work in the
Balkans?