Shannon Chamber CEO Helen Downes with Key Capital’s head of corporate finance Jonathan Dalton and director Tero Tiilikainen. Photo: Eamon Ward.
Irish capital markets have developed considerably since the financial crisis to the point that it is now a great time for SMEs to be raising finance. This was the clear message delivered this week at a seminar in Shannon, organised by Shannon Chamber in conjunction with corporate finance, private wealth management and investment management company, Key Capital, who have been sourcing finance and providing strategic advice to Irish companies for the past fifteen years.
Keynote speakers at the event, Key Capital’s head of corporate finance Jonathan Dalton and director Tero Tiilikainen captured the attention of an audience of progressive SMEs with their frank and in-depth analysis of the types of funding now available to companies. Stating that there is no perfect form of capital, their advice to companies was to understand the different forms of capital and how they differ before looking for it, and most importantly, to know what it is to be used for.
The capital available in Ireland today reflects the investment environment. Post-recession, vulture funds were investing in distressed funds whereas today, a new group of investment funds are investing in success and know how to pick winners.
The experts’ advice to companies seeking investment was: “Know how to successfully pitch to investors. Establish what you are doing well, focus on this, be ambitious, have an achievable business plan, be realistic, present numbers with confidence and, know your business.
“Most owners focus on products but institutional investors don’t care about products,” they said.
“Investors can tell if your product is successful from looking at the top line of the P&L. They want to know if it’s a great business, how well it’s being run and what the investment highlights of the business are.
“Equity investors, backing exits and sales, funding growth, facilitating a management buy-outs or succession planning, or restructuring shareholding, will typically choose to invest in a company with strong management, a protected market position, intellectual property, good systems and processes, strong strategic vision, proven market appetite, attractive margins, and long-term cash generation. They are looking for a business plan and a management team they can back,” they added.
Their parting advice to attendees pitching for investment was: “Tell your story, make it easy for investors to understand the pitch, anticipate and pre-empt rather than be on the back foot. With investors looking at dozens of companies each week, it’s critical to stick to numbers as that’s what investors are most comfortable with,” they added.
Speaking after the event, Dalton said: “There’s never been a better time for Irish SMEs to raise capital. More importantly, there are different forms of capital out there seeking to back a variety of investments. This means that capital is being priced better and in accordance with the risk it’s bearing. That’s a tremendous benefit to Irish companies.”
Attendance at the seminar reflected the appetite by businesses to better understand the new forms of capital entering the market every day. Shannon Chamber’s chief executive Helen Downes commented: “Private equity is as laser focused as Lean, something which Shannon-based companies are becoming extremely proficient in. This should stand to them if seeking additional equity for their businesses.”