are vcs still interested? - sehta · are vcs still interested? ... 10 investors from finance,...
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Are VCs still interested?Christoph RuedigInvestment Director, Albion Ventures
SEHTA AGM and Annual Conference20 June 2013
1 King’s Arms Yard, London, EC2R 7AFT +44 20 7601 1850
www.albion-ventures.co.uk
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Topics
Yes
2
But:,
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Topics
Intro to Albion Ventures
State of the VC industry
Working with VCs
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Introduction to Albion Ventures One of the largest Venture Capital Trust (VCT) managers in UK
7 VCTs AuM £240m 65 companies Portfolio turning over combined £350m, employing 4,000
Experienced team *1996 within Close Brothers ... MBO in ‘09 Managed >150 companies to date 10 investors from finance, strategy, industry & healthcare ... combined ~100 years investing experience
Balanced investment approach Generalist investor with focus on healthcare and renewables Growth capital + mature/asset-backed investments £1m-£10m cheque size
Award winning performance Independent Healthcare Awards Winner 2011 “Investors of the Year” Finalist – HealthInvestor Awards ‘09
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Regulatedtechnology
Non-regulatedtechnology
Albion Healthcare Experience
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IndustryServices
CareServices
Risk & returns
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Topics
Intro to Albion Ventures
State of the VC industry
Working with VCs
6
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The demise of the VC?
“Venture capital has changed forever, and when the shake-out is over it won’t return to the good old days”
“Venture and risk capital have increasingly become less available to deserving start-up and growth companies”
“3i has withdrawn from start-up investing and focusing on later stage deals”
Harvard Business Review:Venture Capital at the Crossroads
Published 1991
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EU and UK VC investments continue to be down ...
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0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Life sciences Other
Funds Invested - Europe Funds Invested - UK
€bn
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
2007 2008 2009 2010 2011 2012
Life sciences Other
€bn
Source: EVCA
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... As does fundraising
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0
10
20
30
40
50
60
70
80
90
2007 2008 2009 2010 2011 2012
VC Other
Funds Raised - Europe Funds Raised - UK
€bn raised
0
5
10
15
20
25
30
35
40
45
50
2007 2008 2009 2010 2011 2012
VC Total
€bn invested
Source: EVCA
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A tale of two continents ...
10Source: Biolauncher
Close to £6bn invested in US medical technology in last 3 years
Just over £1bn invested in EU medical technology over same time
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It’s not all bad in Europe
Good companies continue to be financed
New sources of funds replacing LP/GP structure HMRC sponsored ... VCT, EIS, SEIS Government sponsored ... TSB EU sponsored ... FP-7, regional growth funds HNW / Angels
Public markets are strong ... for now
Life Sciences is viewed as a ‘hedge’ against economic downturn
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Topics
Intro to Albion Ventures
State of the VC industry
Working with VCs
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What opportunity is being addressed?• Is that still true in the future?• Is the market large enough?• Is the need genuine?
How good is the team?• Strategy?• Operations?
What’s the competitive advantage?• IP?• Relationships?• Reputation?
3. Team
2. Market
1.Competitive Advantage
Get the Basics Right• Market, business model
How VCs assess deals
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Investment process
CompletionInvestment committee
Detailed due diligence & legal docs
Investment committee
Heads of Termsagreed
Primarily commercial DD
Valuation
Deal Structure
Initial due diligence
Commercial terms of investment
High-level legal terms
First / bounce committee
Ok to incur deal fees
Financial, legal & commercial DD, referencing
Investment contracts
Second / final committee
Ok to invest
Conditions
£££
Average 1 month – 1 year
weeks - months 1-3 months
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Do’s and Don’ts
Do Don’t
Have a sound and reasonable business plan
Be realistic on funding time scale
Consider the use of a professional advisor
Have proper corporate governance in place prior to approaching VCs
Properly research your future backers
Underestimate how disruptive a fundraising process will be to your business
Expect that you’ll be in complete control of your business after the investment
Take the offer that’s best value for money
Trip over your numbers
Be afraid to ask questions
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Christoph [email protected]
Albion Ventures1 Kings Arms YardEC2R 7AF020 7601 1850
Thank You
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