This month's Breakfast Briefing is focused on the recently launched Cornwall and Isles of Scilly Investment Fund described as a potential 'game changer' in funding for SMEs in Cornwall and Isles of Scilly. We will be joined by representatives from the Cornwall and Isles and Scilly Investment Fund (CIOSIF) in an interactive event that will feature presentations on the CIOSIF and the constituent elements of £40m fund (debt and equity); a presentation on Investor Readiness and plenty of chances for you to ask questions in an informal gathering over breakfast.

1. Cornwall & Isles of Scilly Investment Fund (“CIOSIF”)
Breakfast Briefings – Autumn 2018 Welcome: Richard Wadman, Francis Clark
2 October 2018

2. pkf-francisclark.co.uk
Administration

3. pkf-francisclark.co.uk
.
Presentations followed by discussion
Presenter Topic
Aaron Hamshire
SWIG/ CIOSIF
CIOSIF
Brent Treloar
CIOSIF
Richard Wadman
Corporate Finance Director, Francis
Clark
Investment ready/
Francis Clark/ A2F

4. @CIOSIFBBB
www.ciosif.co.uk
Introduction
Aaron Hamshire & Brent Treloar

5. @CIOSIFBBB
www.ciosif.co.uk
Mission
To invest £40million into high growth Cornish businesses in
order to enable sustainable economic growth
Supporting ambitious and growing SMEs
Creating jobs across the CIoS region
Promoting new product development and innovation
Leveraging private investment (match funding)
Working with the wider finance community and partners

6. @CIOSIFBBB
www.ciosif.co.uk
Why COISIF?
Non-competing, we co-invest
Relationship driven
Local team offers support, advice & expertise
Pragmatic
Seek to understand the individuality of every business
Flexible
FSE Group/SWIG partnership CIC (not for profit)

7. @CIOSIFBBB
www.ciosif.co.uk
FSE
FSE C.I.C – community interest company
Addressing market gaps in SME finance since 2002
Regionally focused operator
 Strong partnerships across the areas in which we operate
16 years experience lending to SMEs
Aligned to the needs and expectations of SMEs
In-house capabilities over the entire deal lifecycle, covering:

8. @CIOSIFBBB
www.ciosif.co.uk
SWIG Finance
• Established in Cornwall 1989
• ERDF Fund Manager for 20+ years
• Start Up Loan Delivery Partner since 2012
• Social and Economic Impact: Last 5 years
• £18m Invested into 1,647 local SMEs
• Helped create/safeguard 2,100 jobs
• Added £50m to the region’s economy

9. @CIOSIFBBB
www.ciosif.co.uk
Equity Investments
For companies affected by the equity gap
Amount: £50,000 – £2million
(excluding matched private
investment)
Co-finance required
Security: generally none
Arrangement fees, monitoring
fees and legal costs apply
High growth potential SMEs
Credible business strategy with
view of exit
Viable product/service; compelling
market opportunity
For activities that deliver substantial
growth impact including:
 Sales & marketing activity
 Hiring new staff
 New product development
5 year exit strategy
Key Features Eligibility

10. @CIOSIFBBB
www.ciosif.co.uk
When to seek equity?
Push Factors:
• Retained profits insufficient
• Further borrowings would raise ‘gearing’
Pull Factors:
• Compelling market opportunity
• Capital with expertise

11. @CIOSIFBBB
www.ciosif.co.uk
Loan
For growing companies with a viable business
proposal that are unable to obtain debt funding
from the private sector due to a lack of collateral or
track record
Amount: £25,000 – £1million
Term: up to 5 years
Security: typically debenture &
personal guarantee (partial)
Interest Rates: typically
10-15+% above base rate
Arrangement Fee applies
New and established SMEs
Cornwall and IOS based
Viable business plan and
compelling commercial
potential
For activities that will deliver
substantial growth impact
including:
 Sales & marketing activity
 Hiring new staff
 New product development
 Entering new markets
Key Features Eligibility

12. @CIOSIFBBB
www.ciosif.co.uk
Factors that influence funding
decisions
• Management
• Financials
• Proposition

13. @CIOSIFBBB
www.ciosif.co.uk
Application Process

14. @CIOSIFBBB
www.ciosif.co.uk
5 key Criteria for ‘investment readiness’
1. Market – growing, desirable, right time & high barriers to entry
2. Offering – compelling market proposition, protectable &
differentiated
3. Business model – viable & scalable
4. Co-funders – are all co-funders in place?
5. Team – risk/reward, capability & composition

15. @CIOSIFBBB
www.ciosif.co.uk
Questions
Brent.treloar@thefsegroup.com

16. @CIOSIFBBB
www.ciosif.co.uk
Thank you
Aaron Hamshire & Brent Treloar
Brent.treloar@thefsegroup.com

17. 17
Richard Wadman, Corporate Finance Director
Investment ready

18. Funding options
Equity Debt Grants
Crowdfunding

19. Selection
• Appropriate
• Tailored
• Competitive

20. Preparation: General
• Industry & current
operations
• Communicates “business
case”
• Future strategy
• Professional
• Tailored
• Especially important for
start-ups
• Realistic
 Supported
• Add up
 Underpin business case
• “Integrated” (Balance
sheet & Cash flow)
 Monthly cash headroom
 Sensitivities
• Licences
• Contracts
• Intellectual property -
ownership?
• Tax – CT, VAT, PAYE/NI
• Statutory + management
accounts & other records
Business plan Projections “Housekeeping”

21. Equity
• Growth
• Restricted matters
• No market = “locked in”
Exit route
Funder requirements
• Understand valuation
• Expertise vs independence
• Passive / active
• Potentially more subjective
Preparation

22. www.website.com
Debt
• Cash flow
• Security
• Covenants – appropriate?
• Govt. initiatives – eligibility
Funder requirements
• Accounts and records
• Projections
• Credit rating
• Shop around
Preparation

23. 23
Grants
• Eligibility – sector, size, location…
• Impact / project – i.e. usually not
for general expenses
• Ongoing compliance
Funder requirements
• Competition - priorities
• Process – time prescriptive, panels
• Match funding
• Cash flow – arrears
• Admin
• Patience
Preparation

24. 24
Business Support
Access to Finance
• Legal and Accounting – Min £500 / Max £7,500
grant
• This grant can fund 50% of costs that are incurred in the
process of accessing finance. These charges from an
Accountant or Solicitor could include:
• Funding for preparation of cashflows, financial forecasts.
• Funding for management accounts in preparation for a
finance application
• Due diligence
• Legal or statutory matters associated with equity funding
• Crowdfunding – Min £500 / Max £2,500 grant
(video)
• Angel investment campaign - Min £500 / Max
£2,500 grant (pitch fees)

25. Cornwall & Isles of Scilly Investment Fund (“CIOSIF”)
Breakfast Briefings – Autumn 2018 Wrap up: Richard Wadman, Francis Clark
2 October 2018

26. Next…
Q&A and/ or discussion
• With opportunity for Q&A for presenters
• Discussion
Future breakfasts – 1st Tuesday of the month
• AIM Listing / Exit strategies – 6th November (FC Boardroom); or
• Accounts (Understanding and “the Cloud”)
• Exporting (Tax and Duties) – 4th December (FC Boardroom)
Other dates for the diary
• Finance in Cornwall – 25th June 2019 (with British Business Bank and
Institute of Chartered Accountants in England and Wales?)
And do not forget our blog, which contains details of new funds/ sources of
SME funding that come to our attention, and our Finance in Cornwall
factsheet.
pkf-francisclark.co.uk

27. Q&A and/ or discussion
pkf-francisclark.co.uk

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