Venture Capital
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NCB Ventures Process
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NCB Ventures Process
NCB VENTURES PROFILE
Michael Murphy
Managing Partner
We are a successful venture capital company with a track record of delivering strong returns to investors.
With €95 million under management, we invest equity capital in fast growing private unquoted companies on a long-term basis.
Following on from the success of our previous funds, the €75 million Ulster Bank Diageo Venture Fund L.P. (managed by NCB Ventures) is actively seeking new opportunities and will invest in growing companies across the island of Ireland.
Our investment range is €1 - €5 million in each portfolio company, and investees will be sourced from a range of sectors including ICT, support services, consumer products and services, leisure and fitness, cleantech, waste services, medtech and engineering.
NCB Ventures invests across all development stages from early stage and expansion through to management buy-out.
We support Irish entrepreneurs who have the vision to build businesses capable of competing in international markets or gaining market-leading positions in the Irish market. Our investments are made on a long-term basis with a view to realising a capital gain within a five to seven year period. We have a track record of supporting investee companies from start-up through to flotation or trade sale.
Sectoral Preferences
- Support Services, Consumer Products and Services, Leisure & Fitness, Childcare
- CleanTech and Renewable Energy
- MedTech and Healthcare
- Industrial Automation, Instrumentation and Engineering
- ICT (including software, communications and consumer internet) and Media
The NCB Ventures Company portfolio covers a range of sectors including Consumer Products & Services, Healthcare & Life Sciences, Information & Communications Technology and Exits.
Company Portfolio
The NCB Ventures Investment Team are multidisciplinary team with over 40 years VC experience that has invested in 34 companies. They are supported by an Investment Committee comprising C. O'Kelly, L. Booth, G. Dilger and G. O'Brien.
The Fund also has an external Advisory Committee (representing investors) and is audited by KPMG.
Meet The Team
INVESTMENT STRATEGY
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- Build a balanced portfolio of companies with exceptional growth prospects
- Generate a running yield from investments where possible
- Investment range €1m - €5m on initial investment
– Maximum investment in one company - 15% of fund value - We acquire strategic minority stakes and appoint a nominee to board
- The Fund invests in the following areas
– Business Support Services / Healthcare Equipment & Services (MedTech) / CleanTech & Renewable Energy / ICT & Media / Consumer Services & Leisure - Back management teams
– Undertaking MBOs / MBIs – Implementing “buy and build” strategies – Effecting recapitalisations/take privates and spin outs - Turnarounds (Examinerships / Receiverships) also considered
- Realise investments in a 5 year time horizon
Investment Criteria
NCB – Value Added
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- Provider of direct financial support & attracting inward co-investment to Ireland
– Co-investment with both strategic and financial investors - NCB has market presence in Ireland and the UK and is part of a network of 10 European investment banks in 14 countries
– Enhanced exit potential - Excellent economic and equity research support
- Business angel access - established business networks and value added contacts
- Nominee director support for investee companies
- Supporting expansions through partner identification and financing for follow on funding requirements with equity placings
– Access to additional sources of capital - capital markets and private clients base - Long term capital support - ability to follow our money
Investment Criteria
Investment Criteria
Close
- the geographic focus of the Fund is the island of Ireland;
- investments will be made over a 5 year time frame and the overall duration of the fund is 10 years;
- the investment range will be between €1 million and €5 million; and
- family succession, restructurings, management buyouts, management buyins, pre-flotation placings and take privates will also be considered.
We will focus our investment activities on:
- manufacturing and service businesses reflecting Ireland's internationally traded services sector;
- sectors which offer the potential for substantial long term capital appreciation including:-
- industrial automation, engineering / instrumentation, nanotechnology, MedTech / healthcare, outsourced business support services, leisure / fitness, consumer products & services and CleanTech; and
- ICT companies in areas such as mobile communications, internet (infrastructure, software and services) and communications (such as broadband).
Investments will be by way of subscription for (i) share capital and/or (ii) loan stock which will have an equity character or be convertible to equity.
VENTURES PROCESS
Contact
Usually we receive a written or verbal summary of the business proposition from the promoters on initial contact. This gives us an overview of the project and at this stage the promoters also submit a full business plan to us.
Business Plan Review
When we receive the business plan we assess whether the project falls within the investment criteria and portfolio strategy of the fund. To complete this assessment it may be necessary to meet with the promoters.
Presentation & Analysis
A presentation from the promoters will normally take place in our offices or the company's premises. The presentation usually clarifies important features of the business plan and involves all key promoters. This gives us the opportunity to raise issues we see as significant at an early stage and get a sense of the promoters' vision for the project.
Following a presentation, we conduct a desktop analysis of the project including a market analysis, comparison with competitors, technical review and financial analysis. This process may require follow-up meetings and the provision of detailed supporting documentation to supplement the business plan. Once the desktop analysis is complete, a decision will be made whether to progress a negotiation of indicative terms.
Term Sheet
A non-binding term sheet will set out the main parameters of the deal. The term sheet will include the amount to be invested, type of investment instrument, any conditions precedent, the treatment of costs and any covenants and warranties required. Once the term sheet is executed by both parties the due diligence process commences.
Due Diligence
The process comprises commercial, financial and legal due diligence. This involves in-depth reviews and analyses of the legal, financial, technical and human resource aspects of the project. This process may involve the use of external experts (Solicitors, Accountants, Technical Advisors, etc.) and the various aspects of due diligence are usually run simultaneously.
Completion
Once the legal and due diligence processes are complete, the transaction is executed and funds are transferred to the company.
BUSINESS PLAN GUIDE
In order for NCB Ventures to gain an understanding of your project, we request that a business plan is submitted. The content of each business plan is determined by the nature of individual project, but should generally cover most of the items listed.
1. Company Description
| 1.1 | Corporate History - Origin and key events |
| 1.2 | Corporate Structure - Subsidiaries and associated companies |
| 1.3 | Promoters/Shareholders/Directors - Names and brief details |
| 1.4 | Markets - Main markets |
| 1.5 | Products or Services - Brief details |
| 1.6 | Financial Position - Highlights of recent performance and overall financial prosition |
| 1.7 | Corporate Objectives - Outline of objectives and strategy to achieve them |
2. Management Team
| 2.1 | Profiles of Promoters and Key Managers - Append detailed curriculum vitae and offer characters and business references |
| 2.2 | Remuneration, Contracts and Options - Details |
| 2.3 | Organisation Chart - Current and proposed |
| 2.4 | Employment - Current and projected |
| 2.5 | General Information on Employees - Trade unions, pay agreements, pension schemes, training, employment and training grants, and all other relevant information on personnel and industrial relations policies |
3. Market Analysis
| 3.1 | ndustry Market Size, Structure and Target Segments - Describe present and future trends by product category in volume and price terms: distinguish between the home market and individual export markets: identify target segments |
| 3.2 | Product Trends - Life cycles, design/use changes, brands, industry fit |
| 3.3 | Customers - Profile of behaviour, preferences, needs and identity of key customers |
| 3.4 | Competitors - Identify main competitors and give respective market shares; identify key competitive features |
| 3.5 | Sales-Related Issues in Target Market Segments - Channels of distribution, sales methods and representation, pricing, trade discount and credit terms, promotion and advertising |
4. Marketing and Sales Strategies
| 4.1 | Market entry plans - Method, timing and channels of distribution, barriers to entry, seasonal factors |
| 4.2 | Pricing Policy - Compare with competing products |
| 4.3 | Sales Targets - Product mix, volumes, prices and market shares |
| 4.4 | Credit Terms/Discounts - Detail and compare with industry norm |
| 4.5 | Promotion and Advertising - Where, how and cost |
| 4.6 | Sales Support and Service - Relate to market entry strategy |
| 4.7 | Trade Restrictions and Regulations - Indicate status of products or services including warranties and product liabilities |
| 4.8 | Competitive Assessment - Products, likely response by competitors and contingency plans |
| 4.9 | Marketing and Sales Grants - Detail grants approved, grants received to date and grants sill due |
5. Products or Services
| 5.1 | Products or Services - Current and planned |
| 5.2 | Product Specification - Brief details, append full specification |
| 5.3 | Technology Status - Product technology, present and future trends |
| 5.4 | Product Testing - Indicate performance achievements |
| 5.5 | Technical Approvals - Indicate whether received/required |
| 5.6 | Patents, Copyrights, Trade Marks and Licences - Indicate status |
| 5.7 | Source or Product/Process Technology - Research and development, licensing, joint venture or other |
| 5.8 | Research and Development - Nature, status and funding |
| 5.9 | Research and Development and Technology Acquisition Grants - Detail grants approved, grants received to date and grants still due |
6. Manufacturing or Operations
| 6.1 | Premises - Describe, including details of title, size, rental and adequacy |
| 6.2 | Manufacturing Process - Describe in detail |
| 6.3 | Plant Capacity and Utilisation - Relate to sales targets: identify planned capital expenditure |
| 6.4 | Suppliers and Materials - Highlight key suppliers/second source |
| 6.5 | Sub-contractors - Details |
| 6.6 | Productivity and Labour Costs - Details |
| 6.7 | Quality Control - Specify procedures, standards set and quality awards |
| 6.8 | Production Costs - Standard cost data, control procedures and competitive position |
| 6.9 | Transport and Distribution - Method and cost |
| 6.10 | Capital Grants - Detail grants approved, grants received to date and grants still due |
7. Financial
| 7.1 | Historical Performance - Last 3 years audited accounts |
| 7.2 | Current Trading - Year to date - actual against budget |
| 7.3 | Details of Share Capital - Authorised and issued; list shareholders and indicate any options |
| 7.4 | Assumptions used in Projections - List in detail |
| 7.5 | Projected Profit and Loss Accounts, Balance Sheets and Cash Flow Statements - Detailed projections for the next 3-5 years |
| 7.6 | Sensitivity Analysis - Discuss the main risk factors and consider impact of such risks |
| 7.7 | Other Financial Information - Detail all planned capital expenditure and all other material matters |
8. Investment Proposal
| 8.1 | Financial Package - Total amount of finance being sought and intended providers; the specific use of funds sought (e.g. purchase fixed assets, finance stock and debtors, product or market development costs) |
| 8.2 | Type - Indicate combination of oridinary or redeemable preference shares or loan capital and the percentage shareholding on offer |
| 8.3 | Valuation - Indicate the value of the company and relate it to the percentage holding being offered to investors |
| 8.4 | Period - Indicate the period for which the finance is required |
| 8.5 | Rate of Return - Indicate the rate of return an investor should expect based on the financial projections |
| 8.6 | Exit Route - Specify how the investor could realise his investment - sale of shares to third parties or a buy back by the promoters or flotation |
| 8.7 | Board Representation - Indicate that it is proposed to allow an external investor nominate a director to the Board |
9. Conclusion
| 9.1 | Strengths of Business - Highlight strengths and opportunities |
| 9.2 | Weaknesses of Business - Highlight weaknesses and threats/td> |
| 9.3 | Why Invest? - Reasoned statement why an external investor should commit funds |
