Tag Archives for Funding

Samantha Sharpe is the NESTA Innovation Policy and Research Fellow

The Judge Business SchoolImage via WikipediaDr Samantha Sharpe is part of the team at the Centre for Business Research, Judge Business School, University of Cambridge studying early stage companies.  She is funded by NESTA and has a project in the same area as the NESTA project using Equity Fingerprint, the business plan resource.

In  her talk at a meeting at Lancster University Management School (when will it be re-named Lancaster Business School?), Samanthan outlined her work on researching the portfolio of investments made by the N W Brown Group, now IQ Capital Partners.  She has been allowed acess to all the confidential information and so is only able to produce summaries of her data.  Most interesting was a graph which related to Equity Fingerprint.  But whilst Equity Fingerprint concentrates on the decisions made by entrepreneurs in raising fund and how it impacts on their ownership of the company, Samantha’s graph showed the total funing of each round from equity, loan and grants – it showed the gearing achieved by the entrepreneurs on the funds raised.  It would be good to incorporate a measure of the change in valuation at each stage.  I also suggested that she showed the number of founders at each round as it appears that most Active Equity Companies have three or more founderswhich is very different from Passive Equity Companies which have fewer than three founders.

Of course the sample reflects the types of team which will approach a relatively small player in theUK funding and not the entrepreneurs who will chose other routes such as a trade investment, angels or VCs.

Would a study across the funding groups show that entrepreneurs who take a specific route – customer funding to VC – be significantly more successful than companies following the IQ Capital Partners route or taking investment from Cambridge Enterprise?  Or should we stop studying and get on with building business?

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Brothers come to the end of the gravy train

HONG KONG, CHINA - OCTOBER 27:  Guests look at...Image by Getty Images via DaylifeBrothers Nico and Alex van Someren look like they will in for the final windfall from their raising of £110million at the height of the dot com boom nearly ten years ago for their company, nCipher.  Yes, it has taken nearly ten years to redistribute the bonanza from the investing shareholders to the other shareholders.  With the brothers and their family owning some 10% of nCipher, they must have collected a cool £11million between them – enough to buy some nice property in Cambridge I hope.

Two things to learn: first, if you are an investor always have redemption rights so you get your money back first (not possible if you invest in public offerings of course); second get in an experienced executive who has done it all before to sell the business.  The brothers have been trying for years to sell the nCipher but serial entrepreneur and racing driver accountant, Geoffrey Finlay has off-loaded the lot to Thales UK in just over twelve months in a very tidy deal.

NCipher makes a great case study and a real example of opportunism.  We all knew the market was at it’s peak but it takes a special type of brotherly love to close a deal.  Well done to the brothers – I am just glad that I did not subscribe at the flotation.

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NESTA making new waves

The arch pattern.Image via WikipediaNESTA is making a break from the past and there is an excellent video at the FT Enterprise site. The FT site is “old fashioned” and just provides a URL and not an embedded video link as you would find on YouTube. There are other interviews by leading entrepreneurs, none from the Cambridge Cluster but all with a good story to tell.

Jonathen Kestenbaum was recruited as CEO of NESTA to shake it all up and get away from funding small start-ups which were not innovative. Now it is about funding larger deals where the NESTA funds make a difference. Kestenbaum sold the family silver (well, the family firm) so he has experience in building and selling a business and the inclination to make a difference.

NESTA are funding a research project with Equity Fingerprint to see if equity funding does make a difference.

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