Capital Exchange (www.capitalexchange.co.uk) has launched the first regulated on-line information and matchmaking service for small companies seeking business finance and potential investors. The site is aimed at bridging the ‘equity gap’ experienced by entrepreneurs requiring finance of between £25,000 and £1.25m. In 1998, approximately £5.5bn of private equity funding was raised, with 88 per cent of this going to management buy-out or buy-in situations. This means there are thousands of business plans that never receive funding simply because they are submitted to the wrong investor and are never seen by the right investor. In addition, there are thousands more businesses wanting to raise finance but not knowing how to go about it.
The Capital Exchange web site provides a practical guide to everything an owner manager of a business needs to know about raising finance right through to providing the opportunity for them to advertise their business plans to interested professionals. It also gives investors easy access to business plans from companies in 34 different industry sectors.
In essence, Capital Exchange aims to provide entrepreneurs with all the tools to achieve their financial business objectives; provide entrepreneurs with the means to advertise their business plans to interested professional investors; and provide a spread of investment opportunities for interested investors.
The site is split into two areas:
a public area offering free advice and information to budding entrepreneurs and a secure, password protected area, to provide absolute confidentiality for businesses advertising their business plans.
Commenting on the launch of the web site, George Johnson, managing director of Eurosil, a company which manufactures automotive components, said: “The Capital Exchange site is an ideal platform for entrepreneurs looking for funding. It is clear, precise and concise enabling visitors to be easily and quickly directed to all the facilities that the site offers. If such a site existed when I was looking for funding for my business a few years ago, it would have been a much quicker process as I would not have had to individually target potential investors.”
David Guest of Hacker Young Chartered Accountants added: “Capltalexchange.co.uk will make life much easier for professional investors who are looking to provide funding in particular industry sectors such as software and computers, general retailers, household goods, food and drug retailers and restaurants. It provides an excellent information service and a database of professional advisors, such as accountants and lawyers, who play a vital role in advising investors.”
The site is the first regulated private equity matchmaking service and is highly cost effective for small businesses seeking finance at just £100 (for six months) to access the entire private equity community. The public area offers entrepreneurs a range of free advice and information services including a comprehensive directory of professional advisers (lawyers, accountants, venture capitalists, tax specialist etc) and a series of self-help guides written by recognised experts including how to write a business plan; advice on corporate finance; tax advice; advice on legal services; and advice on alternative sources of finance.
Hugh Ryan, managing director of Capital Exchange, believes that the new venture provides a unique service: “Research continues to show that there is a significant equity gap between £25,000 and £1.25m both in terms of available finance and in terms of relevant investment opportunities. Anecdotal evidence also tells us that there are an ever increasing number of people with good businesses or business ideas who have no idea how to go about raising the finance necessary to realise their plans. We have deliberately filled our site with practical help and information to guide the entrepreneur through every stage from writing the business plan, through the corporate finance and professional advice maze right through to providing a billboard for them to advertise their business.
“Equally, business angels and other professional investors wanting to invest smallish amounts into start-up businesses very often find it difficult to source these situations. If they want to diversify their interest geographically or into a new sector, their own local network may not be of much help. We believe our site will become the definitive community for businesses and investors interested in this particular segment of the private equity market.”
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