Financing for Technology Businesses

Published by Bailey Fisher Executive Search

Bailey Fisher Executive Search expands its portfolio of networking events for technology decision makers in Cambridge

Bailey Fisher Executive Search is building on the success of its portfolio of networking events for decision makers in the technology sector, with its recent Finance 4 Technology breakfast seminar.  The specialist technology search firm already runs the popular series of Women 4 Technology networking events for female CEOs, CXOs, VCs and business angels, in addition to a quarterly Chairman’s Dinner and an informal networking forum for First-time CEOs

At the Finance 4 Technology breakfast seminar, hosted at St John’s Innovation Centre, Finance Directors and Financial Controllers from Cambridge’s technology companies picked up tips on sources of financing from VCs, banks and grants.  The guest speakers - Laurence Garrett, Valerie Dring and Annabel Grant – shared their insights with FDs and FCs from 35 companies in the Cambridge cluster.  

Laurence Garrett’s key messages for companies seeking VC funding were to be prepared, get some revenues and be selective in which funds you approach.   An experienced VC with a background as a Partner at 3i, Laurence highlighted the reduction in VC funding – down 50% last year, the need for capital light models, and the move to late stage, with some exceptions. The exit horizon is healthy, with many large multinationals looking to acquire.  

Val Dring specialises in working with innovative businesses in her role as Director at NatWest. 

Val highlighted sources of finance from banks, which include the Enterprise Finance Guarantee, a Government-backed scheme which guarantees 75% of the loan on borrowing of up to £1m.  This can take the form of an overdraft or a loan to finance expansion, working capital, equipment or acquisitions.  Invoice Finance: Invoice Discounting and Factoring provides working capital by advancing funds against the debtor book. A business can typically borrow 70% – 90% of the debtors’ book, and this can be very useful for growth companies as the facility grows with the debtors’ book.  The facility works best for companies that sell a product or service which does not require ongoing support or maintenance.   

Most bank finance is not suitable for very early stage R&D companies, as it is only available once a business starts to sell its products or services.   

Such companies could consider grant funding.  Annabel Grant manages the East of England Development Agency’s (EEDA) innovation funding package for early stage and more established technology businesses.  Annabel spoke about grants as a very good source of funding for early stage technology businesses as there is no requirement to pay the money back, the grant can be used to lever in private investment and will cover all the usual R&D costs including IP protection.  Full details of all grants, loans and investment readiness support available from EEDA can be found at www.eeda.org.uk/finance

 

Finance 4 Technology is run on an invitation-only basis by Bailey Fisher, in conjunction with Charles Russell, Grant Thornton and NatWest. The next event will take place in the summer. Any FDs or FCs interested in attending should please contact Rachel Keaveney at Bailey Fisher on Rachel@baileyfisher.com 

Bailey Fisher Executive Search is one of the UK’s leading independent executive search firms specialising in the high-growth technology sector. Clients include the portfolio companies of leading VC funds, start-up ventures, corporate and academic spin-outs and listed companies.  www.baileyfisher.com 

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