Kingston Smith proudly sponsors Createch 2018
Kingston Smith was proud to sponsor Createch 2018 in June of this year. Attended by over 400 delegates, we hosted a breakout session on ‘UK and US perspectives on funding for growth and exit strategies’.
Part of our session included a panel discussion and we are delighted to share our key points with you:
- Venture capital is alive and well in the UK. Createch businesses do not have to be profitable to be a candidate for investment, albeit being able to demonstrate run-rate revenues of
c. £1m will enhance their chances of success
- According to recent Kingston Smith research there has never been a better time to be looking for funding
- Debt funders are primarily focused on security. For Createch businesses with few assets, that may require founders to offer personal guarantees
- PE houses are on a mission to achieve 3x their money back within 3-5 years, so their main concerns are opportunities for growth and where the exit is going to come from
- When people talk of “exiting by IPO” they should be aware that IPOs usually deliver at best a partial exit for founders, who are expected to remain with the business for a considerable period post-float
- If you are looking for funding, try and look for “Smart Money” so the investor can provide you with funds as well as valuable and useful expertise and connections which complement the skillsets already in the business
- Before you approach people for funding, make sure you are armed with all the relevant data. Potential investors will lose interest quickly if up-to-date financials, KPI and forecast information can’t be provided
- R&D tax relief can provide repayable credits where an early stage business is yet to become profitable – this can provide a serious improvement to cash flow
- Tying in key staff with share incentives can be a commercial necessity but can also be achieved very tax effectively with share schemes such as EMI
- Venture capital reliefs such as SEIS and EIS can be a good way for start-up and growing business to raise capital from business angels. But beware, the rules contain numerous complex conditions and some anti-avoidance provisions. Make sure you take tax advice before using any of these
About Kingston Smith
It has been a record quarter for Kingston Smith Corporate Finance’s media, entertainment and technology team with seven deals completing reflecting the strength of the sector with private equity backed acquirers being particularly busy.
Take a look at our media tech page to find out what other services we can offer you.
Please get in contact if you would like to arrange a meeting to see how we can work together.
M&C Saatchi’s acquisitions of influencer agencies Red Hare and Grey Whippet
“We were delighted and highly impressed with Kingston Smith’s due diligence on Red Hare and Grey Whippet. The team were thorough, commercial and professional throughout and I have no hesitation in recommending them.”
Kingston Smith advises Zebra Worldwide Group on its sale to Creative Drive
“Kingston Smith were true partners from the outset, helping us document and present our business most effectively, achieve the best commercial results whilst also supporting the relationship building process with our new owners. They were, without exception, good people to work with – pragmatic, extremely articulate around the intricacies of the financial process we were navigating, going the extra mile for our cause.”
Kingston Smith raises growth funding for Ubisecure
Grant Paul-Florence, Head of Intermediate Capital at Octopus Investments, said: “Ubisecure is exactly the type of business our funds are looking to back – ambitious management teams with plans for significant growth. We’re grateful to Kingston Smith for introducing us to management and for all the work John and his team put in to structuring this growth capital investment. We’re very excited about the future.”