John Caines Building and funding an International I.C.T. success ITC Regional Business Round Table,...

John CainesJohn Caines

Building and funding an Building and funding an International I.C.T. successInternational I.C.T. success

ITC Regional Business Round Table, Vilnius 2002ITC Regional Business Round Table, Vilnius 2002

Building and funding an Building and funding an International I.C.T. successInternational I.C.T. success

John Caines Business BackgroundJohn Caines Business Background

The U.K. Investment SceneThe U.K. Investment Scene

(Thoughts on) Pulling Ideas Together(Thoughts on) Pulling Ideas Together

Maxima Information GroupMaxima Information Group

Enterprise Resource Planning (ERP) for Enterprise Resource Planning (ERP) for manufacturing and distributionmanufacturing and distribution

Management Buy Out (MBO), 1990.Management Buy Out (MBO), 1990.$0.7m, 8 staff, UK.$0.7m, 8 staff, UK.

Exit, 2000Exit, 2000$65m, 480 staff,$65m, 480 staff,8 European Countries8 European Countries

The Story from (almost) the The Story from (almost) the beginningbeginning

19901990 19941994

Maxima Information GroupMaxima Information Group

1990-94 ($0.7m to $7.0m ; UK)1990-94 ($0.7m to $7.0m ; UK)

Product USP’s, (for ‘early adopters’)Product USP’s, (for ‘early adopters’)

Very simple productVery simple product

Directors did sellingDirectors did selling

All staff customer facingAll staff customer facing

Cash is King!Cash is King!

Catching the ‘Upswing’Catching the ‘Upswing’

19941994 1998 1998

1995-98 ($7m to $65m, Europe) - 11995-98 ($7m to $65m, Europe) - 1

Different type of customerDifferent type of customer

Added Products and ServicesAdded Products and Services

Greater geographic coverage Greater geographic coverage

$5 million VC Injection$5 million VC Injection

1995-98 ($7m to $65m, Europe) - 21995-98 ($7m to $65m, Europe) - 2

Acquisitions / Start UpsAcquisitions / Start UpsDenmark, Norway, Sweden, Denmark, Norway, Sweden, Finland, Germany, Czech Rep,Finland, Germany, Czech Rep,Slovakia.Slovakia.

Funding and managing ‘foreign’ operationsFunding and managing ‘foreign’ operations

Importance of Customer Revenues*:Importance of Customer Revenues*:-- ContractedContracted-- Non-contractedNon-contracted

(* for our business model)(* for our business model)

The U.K. Investment SceneThe U.K. Investment Scene

UK Investors for UK Investments UK Investors for UK Investments (Caines experience) (Caines experience)

- Venture Capitalists- Venture Capitalists

- Other- Other

(+ proxy for U.S.A. ?)(+ proxy for U.S.A. ?)

U.K. Venture CapitalU.K. Venture Capital

150 BVCA members : many varieties150 BVCA members : many varieties + syndicates/ layers+ syndicates/ layers

Sector/Size/Stage/GeographySector/Size/Stage/Geography

E.g’sE.g’s

– UK Technology Start Up US$ 1.5 - $ 7.5 mn UK Technology Start Up US$ 1.5 - $ 7.5 mn = 30 = 30

– Non UK Manufacturing Acquisition US$ 75 – 250 mn = 14Non UK Manufacturing Acquisition US$ 75 – 250 mn = 14

Venture CapitalistsVenture Capitalists

AlwaysAlways- management, management, management- management, management, management- provable market- provable market- provable product- provable product- shareholder protection (i.e. minority - shareholder protection (i.e. minority

control)control)

CurrentlyCurrently-- Market almost closedMarket almost closed

Other Sources of CapitalOther Sources of Capital

Individuals:Individuals:Angels, Ofex , AimAngels, Ofex , Aim

Financial Institutions:Financial Institutions: London Stock ExchangeLondon Stock Exchange

Companies: Companies: Corporate Ventures, Trade PartnersCorporate Ventures, Trade Partners

Government/ International Agencies: Government/ International Agencies: Innovation Centres, Regional Funds, Innovation Centres, Regional Funds, Technology awardsTechnology awards

CUSTOMERS!CUSTOMERS!

Product / Services SuppliedProduct / Services Supplied

Transaction PrepaymentsTransaction Prepayments

Bulk PrepaymentsBulk Prepayments

Outside the U.K.Outside the U.K.

U.K. for Non-BritsU.K. for Non-Brits

U.K. investors outside U.K.U.K. investors outside U.K.

CONTROL/PROTECTION ISSUECONTROL/PROTECTION ISSUE

(Non U.K. investors outside U.K.(Non U.K. investors outside U.K.

Other speakers, please!)Other speakers, please!)

(Thoughts on) Pulling Ideas Together(Thoughts on) Pulling Ideas Together

VC’s not the answer unless…VC’s not the answer unless…

Developing an International ICT businessDeveloping an International ICT business

VC’s not the answer unless…VC’s not the answer unless…

Proven management in target marketsProven management in target marketsAlready revenue earningAlready revenue earningProduct/Customers pass Due DiligenceProduct/Customers pass Due DiligenceSimple, visible protection for shareholdersSimple, visible protection for shareholders30% p.a. Return on Capital30% p.a. Return on Capital

____________________________________________________________________Focus on getting “VC ready” Focus on getting “VC ready”

Some thoughts:Some thoughts: Building an International ICT BusinessesBuilding an International ICT Businesses

(until “VC ready”)(until “VC ready”)

Develop/ Launch Product in ‘home’ marketDevelop/ Launch Product in ‘home’ market

Use local sales force in each countryUse local sales force in each country

Start with resellers outside ‘home’ marketStart with resellers outside ‘home’ market

But make ‘your’ customer [for future]But make ‘your’ customer [for future]

Match funding:Match funding:Local for ‘home’ operation Local for ‘home’ operation

Trade partners for internationalTrade partners for international

When you are “VC ready”When you are “VC ready”

They will come to you!They will come to you!

They will compete for your business!They will compete for your business!

You are in control; you have a great You are in control; you have a great business!business!

Onto the next stage! Onto the next stage!

Good Luck!Good Luck!