Finance Yorkshire Welcome

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Finance YorkshireWelcome
www.finance-yorkshire.com
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Finance YorkshireTony Parsons - Director
www.finance-yorkshire.com
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Finance YorkshireWhy are we here this morning?

• Strengthening relationships with stakeholders,
  partners, intermediaries and clients
• Demonstrating how we are working in partnership
  with our LEP to support business growth
• Looking to the future
• Dialogue and questions

www.finance-yorkshire.com
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Finance YorkshireAgenda

• Tony Parsons, Director, Finance Yorkshire
• Alex McWhirter, CEO, Finance Yorkshire
• David Grey - Local Enterprise Partnership
• Seedcorn Case Study Chris Wright, Faradion
• Business Loans Case Study Peter Skipworth,
  Ecus
• Equity Linked Finance Case Study John Peters,
  GSE Research
• Questions Answers

www.finance-yorkshire.com
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Finance YorkshireAlex McWhirter - CEO
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Finance YorkshireWhat we are
90m Venture Capital and Loan Fund Finance
sourced from 30m European Regional Development
Fund 15m Yorkshire Forward/Business Innovation
and Skills 45m European Investment Bank
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Finance YorkshireOur business approach

• To fully invest the 90 million fund through
  helping SMEs constrained by finance to grow
• To create a sustainable fund
• To be recognised and respected as a key
  participant in the SME business and
  professional sectors
• To stimulate demand for finance in our key
  market segments
• To realise good returns for investors and value
  for money

www.finance-yorkshire.com
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Finance YorkshireOur investment performance so
far...

• 346 investments totalling over 39 million
• On track to meet economic targets jobs created
  safeguarded increase in turnover business
  starts and private sector leverage
• On track to achieve full investment by December
  2014

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Finance YorkshireInvestment Profile
www.finance-yorkshire.com
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Finance YorkshireInvestment impact...

• Created or safeguarded 5620 jobs
• Over 64 million Private Sector Leverage,
  resulting in 2 levered for every 1 invested
• 44.2 million in value added sales
• Legacy fund to be invested in regions businesses
  in line with original objectives - to be utilised
  after 2019

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Finance YorkshireInvestment performance by
location...
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Finance YorkshireInvestment performance by
location...
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Finance YorkshireInvestment performance by
sector...

Sector Analysis All Funds Sector Analysis All Funds Sector Analysis All Funds
Sector Application Process () Investments ()
Business Services 12 18
Engineering / Industrial products / Materials 24 25
Financial Services 1 1
Healthcare / Pharma / Bioscience 14 7
ICT / Software / Telecoms / Media 21 12
Leisure / Hospitality 1 2
Renewables / Energy / Cleantech 6 7
Consumer / Food Drink 6 10
Other 15 18
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Finance YorkshireInvestment criteria

• A business with growth potential
• A new start or growing business
• A business unable to source its full funding
  requirement from the commercial market
• SMEs paying business rates in Yorkshire and the
  Humber or relocating to the region

www.finance-yorkshire.com
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Finance YorkshireThree portfolios

• Seedcorn Finance
• Business Loans
• Equity Linked Finance

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Finance YorkshireSeedcorn Finance

• Start up or early stage innovative businesses
• Involves strong technological know-how and
  credible founders
• First products or services developed with
  potential for rapid growth
• Can invest up to 780,000 over the lifetime of
  the business through equity-based, tranched
  investments
• Investments of 2m when syndicating with other
  funds

www.finance-yorkshire.com
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Finance Yorkshire Case Study Xeros

• Environmentally friendly cleaning company backed
  by Finance Yorkshire Seedcorn Fund. Cleans
  laundry with vastly reduced water using Xeros
  polymer bead technology
• Major savings in power, detergent and effluent
  production with superior cleaning
• Recently completed a 10 million fundraising from
  existing and new investors. New funds
• will be used to roll out the Xerox commercial
  laundry cleaning system and finalise the
  household system

www.finance-yorkshire.com
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Finance YorkshireBusiness Loans

• Fixed rate loans typically between 15,000 -
  150,000 as syndicated or complete financial
  packages for businesses
• Financial packaging with other forms of debt
  finance including the banks
• Range of investments include Working Capital,
  Capital Expenditure, Investment in Premises and
  development capital

www.finance-yorkshire.com
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Finance YorkshireCase Study Wilson Benesch

• Sheffield based company which manufactures high
  end audio loudspeakers and turntables
• Regarded as world class innovator in its field
• 50,000 Business Loan which enabled the company
  to introduce new technologies and buy specialist
  tooling equipment.

www.finance-yorkshire.com
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Finance YorkshireEquity Linked Finance

• Equity-linked investments from 100,000 to 2m
  and Mezzanine loans
• Some start ups, largely growth, development
  capital or expansion
• Work alongside other finance providers to invest
  in larger transactions
• Tailored deal structures to give maximum benefit
  to the investee companies

www.finance-yorkshire.com
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Finance YorkshireCase study Fluent
Communications

• Sheffield based IT lead generation company.
  Combines telemarketing, social media and digital
  marketing for IT sector
• 210,000 Equity Linked investment to help triple
  its workforce in the coming year.
• Investment will also help to purchase office
  equipment, upgrade IT and support working capital

www.finance-yorkshire.com
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Finance YorkshirePortfolio performance to date..

• Finance Yorkshire has
• completed 346 investments
• Invested a total of 39.43m
• Seedcorn Finance 44 investments totalling
  7.93m
• Business Loans 270 Investments totalling
  15.00m
• Equity Linked Finance 32 Investments
  totalling 16.50m

www.finance-yorkshire.com
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Finance YorkshireOur Investment approach

• Working alongside the commercial market
• Maintaining and developing relationships with
  financial intermediaries to promote awareness and
  dealflow
• Market making effect, making deals happen by
  spreading the risk with other investors and
  lenders
• Co-investing with other lenders and funds

www.finance-yorkshire.com
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Finance Yorkshire
David Grey Sheffield City RegionLocal Enterprise
Partnership
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The SCR LEP was formed in Autumn 2010

• One of 24 in the first wave of LEPs there are
  now 39 LEPs across the country (100 coverage)
• A genuine partnership between the public and
  private sector
• Board composition - 19 members
• Private sector Chairman James Newman
• 10 business representatives, including a
  University Vice-chancellor
• 9 Council Leaders (inc. Doncaster Mayor)
• Seven SCR LEP Sector Groups represent the voice
  of business
• Strong / productive relationship with Government

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Priorities set out in our Economic Overview
document (updated January 2013)

• Key Principle 1 Leading on issues of Sheffield
  City Region significance
• Key principle 2 The importance of a true public
  and private sector partnership
• Key principle 3 Adopting a collaborative
  approach
• Key principle 4 Driving innovation to promote
  growth

• Our priorities fall into two main areas
• Maximising the potential of our key growth
  sectors and
• Putting in place the foundations for growth.

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Putting in place the foundations for growth
SCR / LEP PRIORITIES
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Key team initiatives include

• Economic Strategy / Growth plan shaping the SCR
  economic programme in light of proposed
  devolution of powers / funding (including
  European Structural Funds)
• Management of the SCR Enterprise Zone (FT ranked
  number 1)
• Growing places fund prudent investment
  decisions (including JESSICA investment fund)
• City Deal particularly relating reform of
  Skills system

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Key team initiatives include

• Regional Growth Fund programme (Unlocking
  Business Investment) - 25 million, 100m of
  direct business investment, footprint of 2,000
  new jobs by March 2016.
• Inward investment additionality and generating
  new leads
• Sheffield City Region Investment Fund (SCRIF)
  GVA driving infrastructure investment
• Sector Groups voice of key industry sectors

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Finance Yorkshire Seedcorn Fund Testimonial
Chris Wright, Faradion
www.finance-yorkshire.com
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(No Transcript)
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Location

• Kroto centre, University of Sheffield, Yorkshire
• Access to the Materials Science and Engineering
  department
• One of the leading departments of its kind in
  the UK

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Company Overview

• Committed to driving down the cost of battery
  technology
• For storage of renewable energy
• For electric vehicles
• Faradions principal focus is Na-ion battery
  technology
• comparable performance to Li-ion
• lower cost
• enhanced safety
• Strong IP portfolio
• 2013
• Na-ion battery demonstrator cells within the next
  12 months
• low cost LiFePO4 cathode early revenues
• Recent 500K investment

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The Team
Andrew Dixey, Chairman Over thirty years managing
global organisations. Former President and COO of
the Titanium Metals Corporation Director of
Special Metals Company Managing Director of
London Scandinavian Metallurgical Co. Limited
CEO of Atraverda
Dr. Chris Wright, CEO Former Group Operations
Director of AEA Technology PLC, responsible for
Lithium battery licensing, and CEO of IP2IPO Ltd
(now IP Group). Highly experienced entrepreneur
and former executive chairman at Covesion Ltd and
Molecular Vision Ltd
Dr. Jerry Barker, CTO Former Chief Scientist at
Valence Technology Inc. and inventor on gt 90
issued and 50 pending US battery patents.
Inventor of Li-ion active materials LiVPO4F,
Li3V2(PO4)3, LiMSO4F, Li2MP2O7, LiFe(Mg)PO4 and
the Carbothermal Reduction (CTR) manufacturing
method. IBA Technology Award, 2012
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Finance Yorkshires involvement

• A significant role in creating the company
• Helped us get established with premises and links
  to professional advisers
• Provided financial backing for the company
• Gave assistance in early days when applying for
  grants
• Finance Yorkshires Seedcorn Fund provided
  invaluable strategic and tactical advice.

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Finance YorkshireBusiness Loans Testimonial
Dr Peter Skipworth, Ecus
www.finance-yorkshire.com
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Finance Yorkshire Business Loans Customer
Viewpoint and Experience Pete Skipworth
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Presentation Business Loans

• My experience and observations of using this type
  of finance
• 15k to 50k for early stage businesses
• 15k to 75k for established businesses
• 15k to 150k for established and profitable
  businesses
• In a number of companies
• Finance Yorkshire
• (and predecessor fund, South Yorkshire Investment
  Fund)

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Environmental Monitoring
Environmental Consultancy
Infrastructure Management
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• Environmental Monitoring Solutions Ltd
• www.em-solutions.co.uk Industrys Environmental
  Partner
• 0.5m t/o in 2009 to 2m t/o in 2012
• Full-time MD (day job!)
• backed by South Yorkshire Investment Fund

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• Ecus Ltd
• www.ecusltd.co.uk Environmental Consultants
• Full development life-cycle
• pre-planning, planning/design, post-completion
• 1.5m t/o turnaround just returned to
  pre-recession level
• Non-Exec Chairman
• Recent Equity Investment by Finance Yorkshire to
  go multi-office and 5m t/o

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• SEAMS Ltd
• www.seamsltd.co.uk
• Infrastructure Management Software and
  Consultancy
• co-founder and MD from 2002 2009
• grew from start-up to 3m t/o
• backed by South Yorkshire Investment Fund

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Why Finance Yorkshire Business Loans?

• They will consider things that the banks wont
• .......(or the banks wont unless theres lots of
  security)
• Often unsecured
• Taking the risk alongside the business
• Net interest rates only slightly higher than
  banks
• They are interested in getting to know the
  business and require reporting

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What Have I Borrowed Money For?

• Developing the business
• e.g. A marketing push
• e.g. Recruitment of BD
• (a general requirement for working capital)
• New product development
• e.g. Software
• ......things which are less tangible than, say,
  buying an asset

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Syndicating

• Finance Yorkshire Business Loans funding with
• bank funding
• self-funding (from profits)
• All jumping over the edge together!
• Finance Yorkshire Business Loans funding as part
  of Equity Investments with Finance Yorkshire
  Equity Linked Finance team

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Fore-runner to Equity Investment

• Finance Yorkshire from 15k to 150k depending
  on companys stage of development
• So, more one-off projects than game-changing
  company development
• In all 3 cases (EMS, ECUS, SEAMS) this type of
  funding has been a fore-runner to Equity
  Investment
• .....getting to know you

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Conclusion

• A big help along the road of developing companies
• Fills a gap in the availability of finance
• For growth or difficult-to-fund projects
• A stepping stone to bigger things
• Will work flexibly and effectively with other
  funders

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Finance YorkshireEquity Linked Finance
Testimonial
John Peters, GSE Research
www.finance-yorkshire.com
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January 2011 just a kid with a crazy dream
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February April 2011 Too small for PE too big
for angel investors nothing from banks
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April 2011 November 2011 First meetings, many
discussions, many plans
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November 2011 money pit!
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November 2011 December 2012 Frustration.
Challenges, expected and not September 2012
second round investment
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2013 moving ahead at last
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Finance YorkshireFuture work

• Work collaboratively with the Sheffield City
  Region LEP and Local Authorities
• Creating the next gap fund for SMEs after 2014
• Develop the Finance Yorkshire brand and a
  recognised provider of growth finance to SMEs

www.finance-yorkshire.com
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Finance YorkshireMaking an application

• Call us to make sure its eligible 0845 649 0000
  or make enquiry via website www.finance-yorkshire
  .com
• An Investment Manager will contact you to
  discuss.
• Complete Application Form the supporting
  information when advised by the Investment
  Manager.

www.finance-yorkshire.com
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Finance YorkshireQ A
Finance Yorkshire Ltd is a company limited by
guarantee (Registered No 07075478). Finance
Yorkshire Ltd (0845 649 0000) comprises three sub
funds, Finance Yorkshire Equity Fund, which is
managed by Neon Capital Partners Limited, Finance
Yorkshire Small Loans Fund, which is managed by
EV Business Loans Limited and Finance Yorkshire
Seedcorn Fund, which is managed by Enterprise
Ventures Limited. Each of these Fund Managers is
authorised and regulated by the Financial
Services Authority.
www.finance-yorkshire.com