What is the Investment Readiness Programme?
It’s a programme run by the University of Warwick Science Park on behalf of the Business Links of Coventry & Warwickshire and Birmingham & Solihull, and is funded by Advantage West Midlands and the European Regional Development Fund.
Its aims are to support potentially high-growth technology & innovative enterprises (primarily, but not restricted to IT, software development, engineering design and medical technologies) develop their infrastructure and/or business proposal so that they are more attractive to the investment community or traditional funding sources.
How does Investment Readiness work?
Each client is assigned a mentor who will:
o Assess the business proposition or idea.
o Consider the strengths and weaknesses of the business.
o Identify relevant resources on the programme that may assist the business.
o Agree an action plan to ultimately improve and grow the business.
o Access appropriate debt and/or equity funding.
What specific areas of support or resources can be accessed?
These can include:
o Pre-seed Proof of Concept Fund.
o Interim Management.
o AWM Mustard Consultancy.
o Mainstream Business Link Programmes.
o UWSP Business Support Services.
o Other regional services e.g. National B2B Centre, WMG, MediLink, Vision Works.
o Access to Business Angel and other Public & Private VC Funds.
What if my company is not Investment Ready at the end of the process?
Although some businesses will not ultimately become suitable for equity finance, they will have benefited from significant interventions of mentors and others, brought about through participation on the programme.
The seed fund will bridge the funding gap that these companies typically face in:
What is the Seed Fund?
o Enabling final stage product development.
o Building of prototypes.
o Field & beta testing.
o Technical market research.
o Identification of new markets.
o Early stage test marketing.
Seed fund monies will in many instances be invested in high-risk situations. It is also hoped that the package of support available will limit this risk, expose deficiencies at an early stage and be able to provide solutions.
The investments will range between £5k and £50k and will be equity linked at a fair and reasonable valuation. Often the injection of seed fund monies has been crucial in attracting other external financial support from the private sector as well as the public sector in some circumstances, and may well be one of a package of funding sources including more traditional bank finance (possibly SFLGS related).
The whole process as well as seed funding has been a crucial link for companies proving their concept to the other regional venture capital funds and business angels or private investors. UWSP will, with permission, ensure these sources are kept aware of developments at an early stage.
What is the process to access the Seed Fund?
o The client company is identified as a potential Seed Fund applicant, following an initial assessment by the mentor.
o This assessment may conclude that the business needs to improve in certain areas before submission, and this may involve use of an Interim Manager or other resources as appropriate.
o The mentor will help the company to prepare the appropriate presentation/ application, which in some cases is simply be supported by basic details of the company and business proposition. However, going forward in cases like this it would be expected that one of the early outcomes would be provision of a suitable and validated business plan.
o The Seed Fund Manger will then take on the proposal and final presentation to Seed Fund Investment Committee who may approve investment or request further information as required.
o Monies invested by the Seed Fund will be tracked during the term of the project, through regular appraisals, usually through an appointed mentor.
Seed Fund Exit
Exits and repayment may come from retained profits, trade sales, MBIs or MBOs or other means. The value and expected timelines for any of these will vary according to expectations and from experience will vary a great deal from those early forecasts.
What is the role of the Interim Manager?
This programme is currently able to part fund an interim manager whose role & activities will have been identified and agreed with the company, to provide “hands-on” assistance in addressing areas that must be addressed if the company are to move forward and access equity finance.
What can the Interim Manager do?
Practical tasks maybe helping break through the barriers to market, constructing and implementing a marketing or sales campaign, developing the business plan and associated forecasts, it may be over a period of time and involve more than one person - the Interim manager facility may be the difference a company needs to fulfil their potential.
How long can an Interim Management work and how is this paid for?
The duration of the intervention is dictated by the need of the business and may be in more than one session over a period of time. However, whilst the Investment Readiness programme would fund up to 50% of the cost of the manager, the remainder would have to be paid for by the company, but the duration, cost and benefits to the company would all be agreed beforehand so the company will know at the start what they are getting and the costs involved.
Is there a cost to join the Investment Readiness programme?
The cost to join is £600 + VAT, payment of which can be spread over six months as required. Where a start-up or early stage company is unable to pay the fees, these may be waived until the company is in a position to pay at an agreed later date.
This programme has already successfully helped 25 businesses, raise almost £2.4m (@ Feb 2005) and assisted well over 100 companies improve their business proposition.