Finance Director Services Case Studies

Venture Capital fundraising

Risk management software

Iconium launched their first software products in 2006, with excellent customer feedback, but lacked the financial resource to take full advantage of their position. Equity funding had been considered but Iconium were concerned that they lacked financial credibility and that their Business Plan may not stand up to rigorous financial review by a potential investor. Like many young ambitious and growing companies at this stage of growth, a senior Finance Director would have been a significant financial burden and a full time appointment would have been inappropriate.

Through late summer 2006 Harvey Mitchell of Orchard Growth Partners worked with Iconium’s senior management team, applying the skills and experience gained in over twenty years in the software industry. Following his appointment, the first four weeks were a steep learning curve as the Business Plan was fully reviewed and overhauled and pitched to potential investors.

Over the final quarter of 2006 Harvey continued to work with Iconium in three key areas as the funding gained momentum by:

• Creating and attending investor presentations and meetings

• Providing advice and assistance during the commercial, financial and legal due diligence processes

• Ensuring that Iconium’s financial and commercial controls and processes would be appropriate in a post investment position.

“The support, advice and experience we were able to tap into through using an Orchard Growth Principal when we needed him, both commercially and financially, were invaluable during this time” says Waldock, “ensuring the process had the best possible chance of success for us”.

Indeed success it was, with an investment by The Capital Fund completing in January 2007.

Strategic business review and disposal

Software

This client was an established software business which was having difficulties with business growth despite having some very good products.

The assignment began by reviewing the monthly reporting to the management team and Board. After implementing a more focussed and leaner report, we were involved in the reorganisation of the management of the company to ensure better accountability of the business segments.

Finally, we led a strategic review of the company to identify the numerous options available, and then with the preferred option of a sale of the company having been chosen we led the process leading to identification of suitable corporate finance advisers to execute the sale.

Business review and refocus

Insurance sector

Founded in 2002, software company IT-Freedom provides solutions to the insurance industry. In the early days the focus was on research and development, but when the Board conducted a review of the business in 2007, it was clear that the company had reached a watershed.

Potential Weakness:

The review concluded that with the majority of the product development completed the company needed to get the products to market. It also underlined a potential weakness in the Management Team: no one had a professional accountancy qualification. "We felt we needed advice on managing cashflow and outside investment as a start point" says Managing Director Mick Sargeant. He approached Orchard Growth Partners, specifically attracted by our focus on providing highly commercial and experienced part time FD’s on a flexible basis. IT-Freedom chose Orchard Principal Harvey Mitchell to provide financial director services, not least because he has extensive software market experience.

More Strategic:

Mitchell’s first task was reviewing the company’s progress to date and provide input on the way forward. He rapidly realised that the driver for managing cashflow was much more strategic than first appeared. “His key recommendation was to shift the company’s focus from being an R+D centric organization to a Selling and Marketing one,” says Sargeant. As a result IT-Freedom has hired specialized Marketing staff and further Sales staff, driving sales forward and setting about selling its way to growth.
“This was a critical point in IT-Freedom’s development and growth, where many companies with potential flounder.” says Mitchell. “It really is vital to ensure you have a strategic business model that you are working towards and thus a company shape and profile you need to gain to be successful.”
Mitchell is continuing to work with IT-Freedom, fulfilling the role of part time FD, helping to take the company through its next phase of development.

About IT-Freedom:

IT-Freedom provides best practice web-based solutions for the general insurance industry. A wealth of knowledge and experience has been combined with excellent technical design to produce the ICE suite of solutions. ICE Claims™ helps insurers change the way claims are managed and ICE Track™ solves the complex problem of managing your business through the provision of easily obtainable information. By challenging accepted practices and procedures and harnessing technology we are leading the change.

FD support from scratch

Healthcare start-up

Whilst most of our clients are established businesses which reach a point where they need on-going Finance Director involvement without the full-time cost, there are occasions where we help clients as they start-up.

This client arose as a result of two entrepreneurs wanting to enter the healthcare arena. We helped them with setting up their company which was then used to identify acquisition opportunities in which our role was to assess the companies from a financial and strategic perspective.We also advised on the suitability of prospective acquisitions to the ability of the company to raise equity finance, and on the merits of different stock exchanges.

The client has recently listed on a stock exchange in the United States.

Pro Bono programme

Four young telecoms experts and an idea

This pro bono assignment arose from four young company executives with significant telecoms expertise. With little business experience, we assisted them in preparing a business plan and financial forecasts. We then worked with the client to produce an Information Memorandum for prospective investors which was comprehensive yet clear and concise. The business was eventually sold to a listed telecoms company.