What venture capital funders want

1
What venture capital funders want

• Jennifer Raffle Manchester Technology Fund
• BBSRC workshop 24 May 2005

2
Outline

• What is the Manchester Technology Fund?
• Sources of VC funding
• What VCs want debunking the myths
• What VCs want the textbook answer
• Importance of gut feel
• Case studies from our portfolio

3
What is the Manchester Technology Fund?

• The Universitys on-campus venture fund
• Invests in spin-out companies
• Up to 250,000 per company
• Active support in commercial strategy,
  recruitment and further fund-raising
• Contact us via UMIP project managers

4
What VCs want

• To make large financial returns
• To invest! Availability of funds has arguably
  never been greater

5
Examples of funders

• University of Manchester funds
• UMIP proof-of-concept and follow-on funds
• Ourselves MTF - 6 million fund of which just
  over half is invested

6
External regional VC funds
Some 80m to invest over 2-4 years
7
National and International Funds2bn in Europe/
15bn US in 2004

• Some funds visiting Manchester

3i Albany Venture Managers Atlas Venture Avlar
Bioventures Amadeus BioVeda Capital Care Capital
Delta Partners Healthcap Ventures Merlin
Biosciences MTI Ventures Schroder Ventures Life
Sciences Scottish Equity Partners
8
Debunking the myths

• I must have a professionally produced business
  plan
• I must have some business people on board
• Id better ask for at least a million otherwise
  they wont take me seriously
• Id better tell them theres no competition
  otherwise they wont be interested
• Venture capitalists are all sharks or sheep

9
Investment criteria the textbook answer

• Market opportunity
• Intellectual property
• Inventor profile
• Commercial leadership

10
Gut feel

• Good judgement
• Self-organisation
• Clear and concise articulation of ideas
• Energy and enthusiasm

11
Case studies from our portfolio

• Gentronix larger investment into an established
  company which had previously raised funds
• AI2 smaller investment into pre-incorporation
  project