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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!