All posts by Patrick Doherty

marketing roi
Finance

ROI from marketing across various sectors

How ROI Can Vary Across Different Sectors

£115.9 million went towards direct mail marketing and online platforms in the UK automotive industry in 2016. That’s according to figures from Google’s Car Purchasing UK Report from April 2017. Of course, the car industry has a massive budget at their disposal when it comes to marketing, one that not all industries can match. Plus, with so many people vying for a digital presence, the cost of online marketing is rising. Is it really worth the cost? Audi servicing plan providers, Vindis, explores the matter across many sectors.

Automotive industry
Car shoppers are heading more and more to the online world than ever before, according to Google’s Drive To Decide Report. Over 82% of the UK population aged 18 and over have access to the internet for personal reasons, 85% use smartphones, and 65% choose a smartphone as their preferred device to access the internet. These figures show that for car dealers to keep their head in the game, a digital transition is vital.

The report also showed that 90% of car shoppers researched online before buying. 51% of buyers start their auto research online, with 41% of those using a search engine. To capture those shoppers beginning their research online, car dealers must think in terms of the customer’s micro moments of influence, which could include online display ads – one marketing method that currently occupies a significant proportion of car dealers’ marketing budgets.

In fact, 11% of the total UK Digital Ad Spending Growth in 2017 was from the car industry, according to eMarketer, which puts the industry second only to retail. The automotive industry is forecast to see a further 9.5% increase in ad spending in 2018.

But is online really impacted a buyer’s choices? 41% of shoppers who research online find their smartphone research ‘very valuable’. 60% said they were influenced by what they saw in the media, of which 22% were influenced by marketing promotions – proving online investment is working. But traditional methods of TV and radio still remain the most invested forms of marketing for the automotive sector. However, in the last past five years, it is digital that has made the biggest jump from fifth most popular method to third, seeing an increase of 10.6% in expenditure.

Fashion industry
Fashion retailers need to keep an eye on online investments, as the online world is strong for the fashion industry – ecommerce accounted for £16.2 billion in sales for the sector in 2017. This figure is expected to continue to grow by a huge 79% by 2022. So where are fashion retailers investing their marketing budgets? Has online marketing become a priority?

The British Retail Consortium stated that ecommerce made up nearly 75% of all purchases for December 2017. Online brands such as ASOS and Boohoo continue to embrace the online shopping phenomenon. ASOS experienced an 18% UK sales growth in the final four months of 2017, whilst Boohoo saw a 31% increase in sales throughout the same period.

Brands like John Lewis, Next, and Marks and Spencer have set aside millions towards their online presence, in order to make the most of the rise of online shopping. John Lewis announced that 40% of its Christmas sales came from online shoppers, and whilst Next struggled to keep up with the sales growth of its competitors, it has announced it will invest £10 million into its online marketing and operations.

People don’t enjoy the idea of wandering the high street anymore. Instead they like the idea of being able to conveniently shop from the comfort of their home, or via their smartphone devices whilst on the move.

Influencers are becoming a big thing for fashion marketing too; PMYB Influencer Marketing Agency noted that 59% of marketers for the fashion world ramped up their spend for influencers last year. In fact, 75% of global fashion brands collaborate with social media influencers as part of their marketing strategy. More than a third of marketers believe influencer marketing to be more successful than traditional methods of advertising in 2017 – as 22% of customers are said to be acquired through influencer marketing.

Utilities industry
Comparison websites are an important part of picking utilities suppliers for customers, so gaining and retaining customers falls on those websites. With comparison websites spending millions on TV marketing campaigns that are watched by the masses, it has become vital for many utility suppliers to be listed on comparison websites and offer a very competitive price, in order to stay in the game.

Compare the Market, MoneySupermarket, Confused.com, and Go Compare make up the largest comparison sites as well as being in the top 100 highest advertising spenders in the UK. Comparison sites can be the difference between a high rate of customer retention for one supplier and a high rate of customer acquisition for another. If you don’t beat your competitors, then what is to stop your existing and potential new customers choosing your competitors over you?

One of the Big Six energy suppliers, British Gas, has changed its main focus from new customer to retaining customers. Whilst the company recognise that this approach to marketing will be a slower process to yield measurable results, they firmly believe that retention will in turn lead to acquisition. The Gas company hope that by marketing a wider range of tailored products and services to their existing customers, they will be able to improve customer retention.

This priority change is reflected in British Gas’s decision to invest £100 million into their customer loyalty scheme, to reward those who stay with them. The utilities sector is incredibly competitive, so it is vital that companies invest in their existing customers before looking for new customers.

Google’s Public Utilities Report in December 2017 showed how the utilities sector has strengthened online, with 40% of all searches occurring on mobile, and 45% of ad impressions delivered on mobile. As mobile usage continues to soar, companies need to consider content created specifically for mobile users as they account for a large proportion of the market now.

Healthcare industry
Marketing in the healthcare industry is a far cry from any other sector in terms of restrictions. The same ROI methods that have been adopted by other sectors simply don’t work for the healthcare market. Despite nearly 74% of all healthcare marketing emails remaining unopened, you’ll be surprised to learn that email marketing is essential for the healthcare industry’s marketing strategy.

Around 2.5 million people have email as their main communication method, and the number is rising. This means email marketing is targeting a large audience. For this reason, 62% of physicians and other healthcare providers prefer communication via email – and now that smartphone devices allow users to check their emails on their device, email marketing puts companies at the fingertips of their audience.

With one in 20 Google searches being for health content, it’s definitely worth the investment of the healthcare industry to be online. This could be attributed to the fact that many people turn to a search engine for medical answer before calling the GP. In relation to this, Pew Research Center data shows 77% of all health enquiries begin at a search engine – and 72% of total internet users say they’ve looked online for health information within the past year. Furthermore, 52% of smartphone users have used their device to look up the medical information they require. Statistics estimate that marketing spend for online marketing accounts for 35% of the overall budget.

And that’s without considering social media marketing. Whilst the healthcare industry is restricted to how they market their services and products, that doesn’t mean social media should be neglected. In fact, an effective social media campaign could be a crucial investment for organisations, with 41% of people choosing a healthcare provider based on their social media reputation! And the reason? The success of social campaigns is usually attributed to the fact audiences can engage with the content on familiar platforms.

Should you invest?
Online marketing is clearly vital for many sectors, particularly for fashion and car sales. With a clear increase in online demand in both sectors that is changing the purchase process, some game players could find themselves out of the game before it has even begun if they neglect digital.

There’s a lot more to consider, particularly for utilities. Whilst TV and digital appear to remain the main sales driving forces, its more than just creating your own marketing campaign when comparison sites need to be considered. Without the correct marketing, advertising or listing on comparison sites, you could fall behind.

The average firm in 2018 is set to put an estimated 41% of their marketing budget towards online strategies, and this is expected to rise to 45% by 2020, says webstrategies.com. Social media advertising investments is expected to represent 25% of total online spending and search engine banner ads are also expected to grow significantly too – all presumably as a result of more mobile and online usage.

How do you view the investment? If mobile and online usage continues to grow year on year at the rate it has done in the past few years, we forecast the investment to be not only worthwhile but essential.

Sources
https://pmyb.co.uk/global-fashion-company-influencer-marketing-budget/
https://www.prnewswire.com/news-releases/the-uk-clothing-market-2017-2022-300483862.html
http://uk.fashionnetwork.com/news/Online-is-key-focus-for-UK-fashion-retail-investment-in-2017,783787.html#.WrOjxOjFKUk
http://www.mobyaffiliates.com/blog/retail-accounts-for-14-2-of-digital-advertising-spending-in-the-uk-in-2017/
http://www.thisismoney.co.uk/money/bills/article-2933401/Energy-price-comparison-sites-spend-110m-annoying-adverts.html
http://www.thedrum.com/news/2017/03/28/british-gas-shifts-acquisition-retention-marketing-know-the-value-keeping-the-right
https://www.independent.co.uk/news/business/news/uk-companies-online-advertising-spend-10-billion-more-last-year-2016-pwc-a7678536.html
https://www.webstrategiesinc.com/blog/how-much-budget-for-online-marketing-in-2014
https://www.kunocreative.com/blog/healthcare-email-marketing
http://www.evariant.com/blog/10-campaign-best-practices-for-healthcare-marketers
https://getreferralmd.com/2015/02/7-medical-marketing-and-dental-media-strategies-that-really-work/

tax entitlements
Tax

Tax entitlements you could be missing out on

Discover 5 tax entitlements you could be missing out on!

By Tony Mills, Director, Online Tax Rebates​

Whether you’re a CIS or PAYE worker, you may be surprised at what expenses you can claim back and the money you can save in your pay packet each month.

Here’s a simple guide to what tax relief you could be missing out on and how to claim:

 

  • Professional memberships

Not only can signing up to a professional membership help you move quicker up the career ladder – and get paid more – you may also be due money back on any fees.

If you’re a member of a professional body like the Federation of Master Builders, The Chartered Institute of Building or National Federation of Builders for example and pay the subscription fees yourself, you can make a claim…worth 20 percent to a basic rate taxpayer.

If you have not claimed previously, you may be able to make a claim for the last four years. HMRC usually make any adjustments needed through your tax code for the current tax year. If a claim is made after the end of the tax year, this will be repaid by way of a payable order or bank transfer.

 

  • Capital allowances

 Many contractors are missing out on valuable tax relief due to their lack of knowledge around capital expenditure. This can have a significant impact on finances.

If you’re a builder working under CIS, for anything you purchase for business use – such as equipment, machinery and vehicles – you’re eligible to claim capital expenses.

You can claim an allowance of up to 100 percent in the year of purchase on certain items although cars are restricted to 18 percent per annum in most cases. Assets you owned before you started the business may also be claimed if you now use them for your business.

 

  • Tools & Equipment

 Your tools; where would you be without them? If you have to purchase your own tools, you may be due a tax refund on their cost, as well as money back on the costs of maintenance and replacement.

If you’re a PAYE worker, you can make a claim if the same or similar item is not available from your employer. Whereas if you’re a CIS worker, you can claim all tools as an expense.

 

  • Uniform

If you wear a compulsory branded uniform and/or protective clothing at work or on-site, you could be due a one-off rebate for the upkeep. This can be backdated to the last four tax years and received as a single payment, while any future claims will be paid in wages.

Limits on claims vary by industry but the standard flat rate expense allowance for uniform maintenance is £60 for this tax year, meaning basic-rate taxpayers can claim £12 back and higher-rate payers £24. It only takes a couple of minutes online to check using an online calculator.

 

  • Travel

By trade, you’re unlikely to be working from a fixed address every day. The cost of travelling between home and the site you’re assigned to may be claimed as an expense for tax purposes.

 

A workplace is considered temporary if your contract is below 24 months. If your contract length is uncertain, the workplace will be seen as a temporary workplace until you have been there for 24 months, it would then be considered permanent.

Be sure to keep any travel or fuel receipts to make an expense claim via your employer.

 

  • Finally, stay safe…

Don’t fall victim to fraudsters who are sending fake emails and text messages promising tax rebates.

Never hand out any personal or payment details to companies you haven’t approached personally before or to HMRC who will only ever contact you via post or your employer.

Issues

Issue 7 2018

Click the image below to read this months issue!

Wealth & Finance INTL Magazine is dedicated to providing fund managers, institutional and private investors from around the globe with the very latest industry news from across both traditional and alternative investment sectors.

Firstly, we cast a light to Allied Wallet who graces the front cover of this edition. Taking time out of hectic schedule, Dr. Andy Khawaja of Allied Wallet provides us with an insight into the company’s award-winning global online services following his recent success in Wealth & Finance’s Leaders in Finance Awards in which he was rightly awarded the title E-Commerce CEO of the Year.

In this issue, we take a closer look at Pros Assist, a gifted team consisting of qualified practicing members of the Institute of Financial Accountants, notably headed by the Director and Senior Financial Accountant, Alom Rouf. Recently, we profiled both the firm and Alom to discover more about the innovative services that they provide to their clients.

Also in this edition, we discover more about Eze Castle Integration who, for more than two decades, have been the premier provider of technology solutions to the financial and investment management industry. Recently, we profiled the firm and spoke to Dean Hill as we looked to discover more about their innovative ways, especially following their recent success in Wealth & Finance’s Global Excellence Awards where they were awarded title Best in Hedge Fund Technology Services.

At Wealth & Finance Magazine, we sincerely hope that you enjoy reading this month’s issue and look forward to hearing from you.

Why Direct Lending is so Attractive to Investors
Transactional and Investment Banking

Why Direct Lending is so Attractive to Investors

At a time when investment and wealth preservation is as challenging as ever, direct lending offers an alternative for asset managers looking to invest.

There is a growing trend for non-bank lenders to loan money to companies, cutting out the middleman. Indeed, institutional investment is now the direct lending in the UK as it has been seen as a way to source alternative finance and funding for a variety of industries.

Direct lending started in the UK in 2005 with consumers borrowing from other consumers. Today, borrowers have increased and widened across many asset classes and the types of lenders have also expanded.

Direct lending is often now used to describe P2P lending and this reflects the growing number of diverse lenders keeping up with the high demand from borrowers.

Direct lending offers an attractive investment opportunity, gaining:

– Higher returns than a savings account could
– Lower volatility than stock markets

Likewise, borrowers are attracted by the lower rates and quick loan decisions.

Why direct lend?

Other investment options aren’t as reliable as they used to be so it has become prudent to invest elsewhere.

Stock markets remain volatile and therefore now difficult to find a safe-haven for money.

Add to this the decreasing yields on the usual ‘go to’ investment products and savings accounts that now offer little return.

Furthermore, Q4 2017 saw inflation rise to 3.0% – with the ever threat of increasing inflation. 

Direct lending is also attractive when compared to other credit-grade investment choices:

A gap in the market was seized

Traditional banks have cut back on business lending in recent times, especially to SMEs, as tighter regulations have changed the post-financial lending culture. These tighter regulations aim to reinforce bank capital requirements and reduce leverage.

This has created an opportunity for alternative lenders and this gap in the market is being seized by investors who are offering loans to mid-market companies as an answer to low-yield problems.

Direct lenders can work under more favourable circumstances, therefore taking on the companies with high leverage simply because they don’t have to adhere to capital requirement guidelines. This results in more attractive returns for the investor.

Direct lending isn’t a passing fad

Direct lending was relatively untapped until recently, but research by the Alternative Credit Council (ACC) has led them to predict that global lending is expected to break the US $1 trillion mark by 2020.

The UK direct lending market is substantial and has grown considerably in recent years – with plenty of room for direct lending to continue to grow further.

The UK direct lending market accounted for £4.5 billion of lending in 2017 – this is an increase of 21% in a year.

Europe is catching up

In 2017, European direct lending grew to around US $22bn, alongside the growth of mergers and acquisitions amongst SMEs. With SMEs seeking alternative ways to finance this growth the two are intrinsically linked.

Institutional lenders now account for more than half of the direct lending in the UK – yet the UK media still remain skeptical about the industry. One of the reasons for this is that direct lending is often mistakenly confused with equity crowdfunding in the media.

Direct lending is much more established in the US and Asia and Europe is set to follow. In fact, shrewd P2P investment is helping clients who may not be able to get finance from banks and this in turn is injecting sluggish economies.

The borrowers benefit from loans that are secured and have straightforward and open arrangement fees from the start.

In turn, investors have the potential for attractive yields, low volatility and low correlation compared to other asset classes:

European direct lenders are teaming up to chase bigger deals and more high-profile firms. For example Zenith Group Holdings Ltd and Non-Standard Finance Plc used direct lenders to meet their financial needs.

An increasing number of investors

Direct lending started with asset managers lending to mid-market companies and therefore filling in the gaps left by the banks. Now other types of companies such as P2P platforms are joining in and taking up the market for smaller loans, while the asset managers have the expertise for the larger loans – creating an even more prosperous and thriving investment climate.

In fact, in 2017 there were more than one hundred direct lending platforms facilitating more than £4.5 billion of lending.

In turn, fund managers can offer bigger loans as the money flows, making direct lending more attractive with potential for returning clients.

Untapped potential

There is plenty of untapped potential from retail gatekeepers who have yet to wholly embrace direct lending:

Are there any downsides to direct lending?

The extra leverage that makes direct loans more attractive to a borrower, is also a higher risk to take if the economy takes a dive.

The need for direct loans grew from the banks refusing businesses simply due to tightening of restrictions – these were safe and dependable businesses that were suddenly cut off when previously they wouldn’t have had a problem. However, due to a more competitive and growing direct lending market, a growing number of direct lenders seek out the higher-risk financing to companies in trouble.

What does the future hold?

The rate of growth in the direct lending market is slowing, but this is all for the greater good as a ‘flight to quality’ is predicted as better lending platforms outperform weaker or less scrupulous ones.

However – there is still plenty of room for growth long term as reflected in the forecasting statistics.

In 2018, there will likely be an increase in collaboration between direct lenders and traditional lenders – they will complement each other – with banks seeing direct lending as a source of capital.

Another factor will be the concept of open banking which is spreading with a ripple effect across the financial world. For example, the UK’s Open Banking Initiative promotes the use of open application programming interfaces (APIs) to provide access to bank customers’ transaction data. This is certainly something to watch in the future with regard to how direct lenders can use this valuable data.

Direct lending will certainly experience change as it evolves in the coming years, but it is here to stay as an alternative investment opportunity which offers good returns – and ultimately it is uncorrelated and relatively liquid in comparison to other classes.

Exo Investing
Transactional and Investment Banking

Recent launch of Exo Investing

  • Launch of Exo leap-frogs existing online retail wealth management services in landmark moment in the democratisation of investment technology
  •  Exo’s unique use of AI offers investors  a truly individualised, adjustable ETF portfolio, daily risk management and absolute transparency, for a low online fee

It was confirmed today that the investment backing the development and launch of the ground-breaking ‘Exo Investing’ retail digital wealth management platform included a private investment from Benjamin and Ariane de Rothschild.  

This investment was alongside that from the founders of Madrid-based ETS Asset Management Factory who supply Exo with its Quantitative investing technology and capabilities and the former heads of the La Compagnie Benjamin de Rothschild SA, Daniel Treves and Hugo Ferreira, who is also the Chairman of Exo Investing.   

The launch of Exo Investing earlier this year saw retail private investors gain access – for the very first time – to the same sophisticated AI-powered Quantitative investment and risk management technology developed over 30 years by quantitative investment manager ETS for institutional investors and the wealthy clients of Private Banks.

Acting as an expert ‘investment co-pilot’,  Exo’s use of AI sets  it apart from even the most sophisticated of the existing robo-advice platforms, introducing new standards of control, personalisation and risk management.

Moving away from the traditional model of static products and predefined portfolios, Exo instead builds each investor a personal, adjustable portfolio of ETFs based on their own investment preferences. Each portfolio is then monitored 24/7 and recalibrated as frequently as daily to both the individual’s risk appetite and changing market conditions, continually managing each client’s long term risk.

Lennart Asshoff, CEO of Exo Investing said“This investment paves the way for Exo to continue developing this ground-breaking solution for the retail market. Opening the door for thousands of private investors to the important benefits that Quantitative investment science offers is very satisfying having seen what a pivotal difference it can make to investment outcomes during my years working at ETS.

“This level of individually tailored portfolio and risk management has never been available to the retail investor before.  The wider public have never been more reliant on their personal investments for their future financial security and we want to open the door to a new category of investing for as many people as possible,  making truly personalised investing available at scale.”

Hugo Ferreira, Chairman of Exo Investing said“Exo Investing is an exciting example of how the latest advances in technology – from artificial intelligence to the growth in computing power available through the cloud – can be utilised to democratise access to the best services available. For years we have wanted to find a way to provide the huge financial advantage that ETS’s systems deliver to a much wider audience, and Exo is just that. The Fintech zone has a track record of democratising finance and we are proud of Exo as the latest and one of the more significant additions, this time in the increasingly crucial world of private investing.

“My long career managing risk for large organisations around the world has taught me that to successfully ride out market turmoil like the 1987 crash, the internet crises of 2001 and the sub-prime debacle of 2008, you need humility, discipline, transparency and risk control.  I found these in spades 20 years ago in the quantitative investing models developed by ETS.  Now Exo is utilising AI and recent  increases in computing power to offer the same portfolio management technologies to a far wider market and at a highly competitive price.  This is a watershed moment for the private investor.”      

With a potential market size of more than 3.2 million private investors in the UK,  and armed with an obviously superior yet competitively priced proposition,  Exo is set to shake up the existing online investing market significantly.  No existing platform, of whatever scale, offers the private investor so much for so little. As this fact becomes more widely known by the UK’s mass affluent market, Exo is set to  build enviable scale and accolades for transforming outcomes for the private investor.

FairFX
Banking

FairFX launches international business account

  • FairFX to build upon its banking capability with introduction of the Fair Everywhere business current account
  • Fair Everywhere removes the barriers to do business across borders with multi-currency wallets and foreign exchange fees that save businesses time and money
  • Secure Mastercard cards allow customers to streamline business spending around the world
  • Millions of SMEs will no longer have to be penalised by banks which charge extortionate fees

International multi-currency payments provider, FairFX is today announcing the launch of its new global business current account.

The Fair Everywhere business account brings together FairFX’s expertise in international payments with services designed to make global business banking easier, faster and cheaper for those who don’t want borders to limit their business ambitions.

The new Fair Everywhere account allows you to:

  • Manage all your day-to-day business banking and international money transfers in one current account with balances in Sterling, Euro and US Dollar.
  • Open your doors to the world with foreign exchange rates that are game changing for business’ bottom lines.
  • Bank with a business that works as hard as you do – customers have unlimited access to a UK-based customer support team Monday to Saturday.
  • Spend in over 210 countries worldwide with a chip & PIN secure Mastercard debit card
  • Fit your banking around you with the Fair Everywhere mobile app.
  • Get 3.5% cashback rewards from over 50 UK high street retailers simply for doing business as usual.
  • Automate your bill payments through direct debits or standing orders directly from your account.

The account is initially only available to 1,000 customers with existing FairFX Business customers offered priority access. Other businesses can sign up to join the waiting list. 

Ian Strafford-Taylor, CEO of FairFX said: “The Fair Everywhere account is for businesses that don’t see barriers in borders. We’ve brought together the best of both our banking and currency platforms and kept it simple with a straight forward, all inclusive price of £50 per month for an all singing, all dancing account that works as hard as you do.

“We know that most SMEs are not limited by their ambitions and as such they should not be limited by working with banks that penalise them with extortionate fees, complex pricing structures and poor service.”

“We will be launching additional subscription tiers for businesses turning over different amounts and introducing a pay-as you-go pricing option very quickly, to ensure we provide a flexible service that helps our customers be more effective.”

“With Fair Everywhere, we have taken our winning formula of combining market leading value with unmatched service standards and applied it to the underserved SME banking market. This international business account makes it easy for SMEs to manage their day-to-day finances as well as their international payments at exchange rates that are what we believe to be the fairest around and all from a single account.”

“The Fair Everywhere cards will also be issued by the FairFX Group after the Group became a principal member of Mastercard in 2017, which gives us even more control over our supply chain to enhance the product and customer experience.” 

“This launch is a big step for FairFX towards building out our banking and payments offering, and we’re excited about growing with our customers.”

Visit Fair Everywhere to find out more about the international business account.

Issues

Issue 6 2018

Click the image below to read this months issue!

Wealth & Finance INTL Magazine is devoted to providing fund managers, institutional and private investors across the globe with the latest industry news across both traditional and alternative investment sectors.

In this issue, we take a closer look at Caye International Bank. The firm provides stability, confidentiality and higher returns for their customers and clients. Recently, we spoke with Caye’s Senior Vice President, Luigi Wewege about the Bank, its services and his aspirations moving forward.

Elsewhere in this edition, on the 27th July, Brown Brothers Harriman & Co. (BBH) launched the BBH Income Fund (the Fund). The open end mutual Fund will be co-managed by Andrew Hofer and Neil Hohmann. We discover how BBH Income Fund seeks to provide maximum total return with an emphasis on current income, consistent with the preservation of capital and prudent investment management.

Also in this issue, Prophet Equity is a private equity firm that makes control investments in strategically viable, asset-intensive, underperforming companies. We profile the dynamic firm, as we reflect on how over the last nineteen years, Prophet Equity’s Principals have invested in and managed entities with over $6 billion in revenue.

The team here at Wealth & Finance Magazine hope you enjoy reading this month’s insightful edition, and we look forward to hearing from you!

Social impact
Sustainable Finance

Younger Entrepreneurs Choose Social Impact As Their Top Business Priority

A new wave of global entrepreneurs are setting up their businesses with the aim of making a positive impact on society, according to a new report from HSBC Private Banking. The Essence of Enterprise report found that the younger generation of entrepreneurs are leading this trend, with 24% of entrepreneurs aged under 35 motivated by social impact compared to 11% of those aged over 55. The report, now in its third year, is one of the largest, in-depth studies into the motivations and ambitions of entrepreneurs, researching the views of over 3,700 successful entrepreneurs in eleven countries. The report also found that this new generation of entrepreneurs is embracing angel investing, viewing it as a way to connect and collaborate with their peers.

A socially minded brand of entrepreneurship

One in five entrepreneurs considers social responsibility, being active in the community, or environmental responsibility as their top priority as a business owner, rather than prioritising areas such as maximising shareholder value or economic prosperity. Those who prioritise social impact have a greater propensity to engage in angel investing, (55% of impact-focused entrepreneurs versus 44% of entrepreneurs who prioritise commercial factors), and report a stronger willingness to rely on mentors for advice and support (75% of impact-focused entrepreneurs versus 66%).

The report also suggests a strong relationship between an emphasis on social impact and entrepreneurial ambition. 33% of the entrepreneurs projecting high growth ambitions state that they started their ventures with the intention of creating positive social impact, compared to 28% of those projecting the lowest growth. This suggests social impact should be seen as an integral part of the recipe of entrepreneurial success, and not separate from it.

A new investment style

Almost half of respondents (47%) have invested in other private, non-listed businesses, funnelling both capital and expertise back to the entrepreneurial community. However, the research reveals that a new younger generation of entrepreneurs is investing at a much higher rate than their older peers, with 57% of entrepreneurs under 35 undertaking angel investing compared to 29% of entrepreneurs aged over 55.

Differences also exist between the generations in how they perceive and approach angel investing. Over half of younger entrepreneurs (57%) view angel investing as a way to connect and collaborate with peers, staying up to date with industry progress and disrupters and to grow their knowledge and expertise.  Entrepreneurs of an older generation view angel investing as a way to diversify and grow their investment portfolio, approaching angel investing in a more informal style, through their own network of personal contacts. 43% of those over 55 view friends as the best route to new business, while 44% of those under 35 turn instead to professional advisers to source new investment opportunities.

HSBC Private Banking Global Chief Investment Officer Stuart Parkinson said: ‘It’s clear younger entrepreneurs want to do good, and we would be wrong to dismiss this as youthful idealism that will act as a brake on financial success.  They know that their business cannot have the impact they want without sustainable growth, and they are focussed on achieving both. They see a similar virtuous circle when it comes to angel investing; they are happy to invest in the wider business community, to contribute to each other’s successes and to learn from one another.”

Differing approaches across the globe

The report also brings to light the differences in the entrepreneurial mind-set in markets around the globe. Entrepreneurs in the Middle East (66%) are the most active angel investors, with the US (54%) and Mainland China (53%) next in line. By contrast, 45% of UK entrepreneurs are angel investors, along with 35% in Germany and 33% in Switzerland.

Regional traditions have paved the way for different approaches to angel investing between these markets. In the US, angel investing is highly professionalised; investors source new opportunities through formal channels, such as financial or professional advisors. In comparison, entrepreneurs in the Middle East source new opportunities informally, mainly through friends (Use financial advisors US 51%, Middle East 38%) (Use friends US 45%, Middle East 53%) They also perceive their role to be supportive, cultivating business development and leadership skills. In the US, entrepreneurs view their role as a challenger, optimising the performance of the management team by challenging their thinking and strategy.

In Europe, investors are more likely than those in other regions to perceive angel investing as a way to grow and diversify their portfolio, rather than as a way to build their network and share expertise.

In relation to social impact, entrepreneurs in the US and China show a greater emphasis on environmental concerns – 8.1/10 prioritise environmental issues in their business planning compared with 6.7/10 in the UK, Singapore, Switzerland and Australia. When asked about their desire to contribute to communities, entrepreneurs from the Saudi Arabia (64%) and UAE (62%) are most likely to reference being active in the community and civil society as important to their business operations compared to the global average of 44%.

vc funds
Equity

Build a better VC and founders will beat a path to your door

More capital seeking hard and fast returns

With returns from traditional asset classes eroded by low interest rates, there’s plenty of dry powder looking to ride the tech wave while it lasts. Amongst the riskier asset classes, (notwithstanding the cash flooding into cryptos and ICOs), VC is becoming an increasingly attractive destination for capital seeking hard and fast returns.

As an indicator, VC assets under managements have tripled in just 3-4 years, while corporate venturing is back with a vengeance. Pitchbook data also shows that recent VC vintages are distributing capital back to LPs at a much faster pace than older ones, as well as carrying down more than 70% of their capital by the third year of investment.

Compared to the return timelines of adjacent asset classes, one can see why VC presents an attractive alternative, especially with the average Private Equity fund taking a staggering nine years to achieve a Distribution to Paid-in Capital (DPI) of 1.0x.

The ‘Halo Effect’ of traditional venture capital

Fund performance data shows only a dozen of the top VC firms generate consistently high profits. Between 3-5 percent of firms generate 95% of the industry’s profits, whilst the big name funds in the upper decile rarely change.

In a world where these firms are only as good as their last unicorn, this creates a ‘halo effect’ around a handful of well-known, long-standing funds, making it much harder for new entrants with no track record to attract exceptional founders. Meanwhile, a VC fund requires a 3x return to be considered a good investment by LPs, creating a lot of pressure to identify outliers and invest in “fund returners”.

So what defines a VC fund’s success? Is it all about picking winners? Do the top funds have a magic-8 ball to predict the next big market, or the hottest new tech? Or are markets there for the taking, with interest from the top funds compounding valuations through a self-fulfilling prophecy? Surely, it’s all down to the agency of brilliant founders, who gravitate towards the funds with the most capital and the best advice?

VC’s differentiation challenge

While it is hard to assess the additionality of advice over cash, at a later stage, picking winners is notably easier: more mature startups are typically generating revenue (though still unprofitable) and have moved beyond the most uncertain market and product development stages. The odds of a successful exit are also higher, with average loss-rates down to 30% and shorter holding periods (six years, on average).

However, it is also harder for funds at this level to differentiate themselves and attract the best founders looking for the ‘smartest capital’ (cash + advice), although normally it defaults to whichever fund offers the highest valuation. So “if the pound in my pocket is no different to the pound in yours”, how can funds articulate their ‘value add’?

Scanning websites of the best-known funds, they highlight their talent network and team of GPs, but it’s the fund’s track record that stands out, but in practice, the additionality of cash plus advice is extremely intangible.

Since 2009, a handful of US funds, (most notably Andreessen Horowitz) have started to buck the trend, working harder for their portfolio, hustling for them, providing introductions to their network of customers, acquirers and next round money. At the same time, the rise of the micro-VCs (investing across the pre-Series A spectrum) has also crossed the channel into the UK and Europe. However, instead of following an identikit model, these funds are finding a better way…

The earlier the better?

Considering the circumstances, investing earlier makes a lot of sense, not least for pursuing fresh pastures, but also for the most capital efficient returns, where investors can justify a higher reward for the increased risk they are taking, following on relentlessly in the winners of each portfolio.

However, the risks aren’t trivial, and according to Pitchbook, the loss rate amongst pre-series A startups is greater than 65%. Mark Suster, an investor at Upfront Ventures, captures this in his “1/3, 1/3, 1/3” principle: He expects one-third of his investments to be written down to zero, one-third to return the principal, and the remaining third to deliver most of the returns.

There’s no shortage of microfinancing available to pre-seed (“idea” stage) startups (crowdfunding, ICOs, angels, grants, accelerators), but it takes more than just cash + advice to build a rocket, and traditional VC funds are not set up to operate at this level.

Breaking the “two and twenty” model

While accelerator models attempt to plug the gap, investing small amounts of cash, and providing advice via their support networks, they don’t provide startups with the rocketfuel they need. There are also more sophisticated ways of investing than placing small cheques on lots of different bets. VC can add a lot at this level, but at pre-seed and seed, the traditional venture capital model breaks down for three main reasons:

  1. From a risk-return perspective, fund economics don’t work. For most funds, it would require an unmanageable number of deals to beat the odds of a 35% success rate, and still return 3x to the the fund.
  2. The traditional VC workflow doesn’t scale: a handful of GPs/investors receiving polished pitch decks and warm introductions from well-networked founders stands in stark contrast to the thousands of “idea stage” submissions, and systematic screening efforts required. There’s a huge amount of serendipity involved, and this needs to be ‘designed in’ at scale.
  3. Most importantly, startups at this stage require more than just cash + advice. Founders need help to build stuff, and that requires resources most funds can’t sustain out of the traditional two and twenty model.

De-risking through operational support

At Forward Partners, we believe there’s a better way to support early stage founders. Charging a higher management fee to LPs (the percentage of their investment that contributes towards a fund’s operating expenses) unlocks a unique value-add in a team of operators. This allows funds to offer tech, growth and product expertise as well as the hands-on help that founders need in their first year of operations.

By offering a ‘scale up team in miniature’ with experience across UX, design, full-stack development, talent, growth, PR and comms, a VC can truly help to mitigate the mistakes made by early stage startups, build stronger foundations for startups.

About Forward Partners:

Forward Partners is the UK’s leading early-stage VC fund, providing a game changing combination of capital and operational support to supercharge tech startups. Our unique model is helping to build the UK’s next generation of talented AI, e-commerce and marketplace businesses.

Bowmark Capital
Corporate Finance and M&A/Deals

Bowmark Capital backs buy-out of leading alternative legal services provider

“This is all about access to capital for our next stage of growth,” comments LOD CEO Tom Hartley. “We have been exploring alternative options since the summer of 2017 following our successful merger with AdventBalance in Asia and Australia in 2016.”

Neville Eisenberg, BCLP Partner responsible for LOD, said: “BCLP is extremely proud to have been a pioneer in the alternative legal services market. Nurturing the creation of LOD over 10 years ago, and supporting its growth and considerable influence over the legal market as a high quality provider of flexible legal services, has been an extraordinary journey for us all. We believe that LOD is ideally placed for further growth and that this new investment by Bowmark will help facilitate LOD’s ambitious plans. BCLP has committed to remain close to LOD, partnering with the business for its flexible lawyer needs and we look forward to seeing the results of this exciting new chapter in LOD’s development.”

Bowmark Managing Partner Charles Ind said: “We have been tracking the alternative legal services sector for a number of years and are delighted to have the opportunity to become the principal shareholder in LOD and support the whole LOD team as they build on the impressive growth they have achieved to date.”

Hartley adds, “BCLP has been a great owner, client and partner and this is the logical next step for us to take. LOD has already been a separate entity from BCLP for the last six years, during which time we’ve seen excellent growth.  We want to maintain that expansion by continuing to add new service lines, geographies and technology to our existing offering for our lawyers, consultants and clients. LOD is now in the perfect position to continue to lead the alternative legal services market supported by the capital and expertise of Bowmark.”

DasCoin
Finance

Dascoin Now Listed On Coinmarketcap.Com

Coinmarketcap is used by crypto experts and new adopters alike and is ranked as the 44th most popular website in the US according to Amazon rankings.  DasCoin’s Coinmarketcap listing gives the coin and its associated ecosystem, heightened credibility in the sector.

Michael Mathius, CEO of DasCoin said: “We’re excited to be recognised by Coinmarketcap.com.  This shows how much we’ve developed DasCoin and gives us enhanced visibility within the cryptocurrency space.”

Coinmarketcap lists more than 1,600 cryptocurrency prices among other key statistics about the coins and tokens including:

  • Total market capitalisation
  • Current price
  • 24-hour trading volumes
  • Circulating supply
  • Gain/loss

In April, DasCoin became available to trade on public exchanges CoinFalcon, BTC-Alpha and EUBX with several more in the pipeline.  DasCoin will only be traded on public exchanges that operate the same strict “Know Your Customer” authentication protocols that underpin DasCoin itself.

More than 750 million DasCoin have already been minted since March 2017. Members of the NetLeaders community purchase licenses giving them access to a certain number of Cycles – units of capacity – on the blockchain. These Cycles can either be used for a variety of services or submitted to the DasCoin Minting Queue and converted into DasCoin. There will be a total volume of 8.589 billion DasCoin.

DasCoin possesses and operates best-in-class Blockchain technology based upon BitShares’ distributed ledger technology, known as Graphene.  BitShares is one of the longest ledger in existence and is one of the highest performing ledgers with capacity exceeding 100,000 transactions per second.

Addtionally, DasCoins are not “mined” like those of Bitcoin and other proof-of-work coins. The minting process results in a significant reduction in energy consumption, as well as a more equitable distribution of value.

About DasCoin: DasCoin is a better way to store and exchange value and is the next step in the evolution of money. 

DasCoin is the blockchain-based currency at the center of an innovative digital asset system that seeks to optimize the strengths and eliminate the weaknesses of existing currency systems. It is fast, efficient, balanced, secure and scalable. 

DasCoin is focused on creating a digital currency that delivers superior performance through greater operational efficiency, increased transaction capacity, wider distribution, better governance and greater regulatory compliance. Protected by industry leading security protocols and a permissioned blockchain, DasCoin is a pioneer in the sector with the goal of becoming the world’s first mainstream digital currency.

Website: www.dascoin.com

FairFX
FX and Payment

9 top International Payment tips for businesses

Multi-currency payments provider FairFX has revealed that since the Brexit referendum, the Euro has decreased 13% against the pound increasing financial pressure on businesses who operate cross border.

Uncertainty over future trade agreements alongside fluctuating currency rates have put the spotlight on the cost of doing business internationally and highlights the importance of monitoring foreign currency transactions.

An estimated 17% of UK based SMEs are doing business internationally, boosting their own bottom line, as well as the UK economy.  Whilst international expansion offers access to new markets, ambitions for growth need to be well planned financially, starting with the basics.


35% of SMEs state cashflow is a barrier to growth, making smart currency moves essential when it comes to international payments, and by getting the best value for every international transaction, both business ambition and cashflow can be supported.


FairFX Top tips for getting the best value when making international payments

 

  1. Know what you want

To get the best international payment provider for your business you need to know what you want. Consider how regularly you’ll be sending and receiving money overseas, how many currencies you’ll need to transact in and understand the costs associated with making both singular and regular transactions. 

Fees and charges can vary by transaction type, day, time and speed you require the transaction to be completed in, so list out the different transaction types you may want to make and understand how the fees and charges can vary so you don’t get caught out. Understand how currency rates are set and how they compare to other providers. This can be confusing to unpick so speak to a currency expert if necessary.

 

  1. Review your current payment package

High street banks don’t offer the best value when it comes to international business payments. Using your current banking provider to handle international as well as domestic transactions may be convenient but defaulting to them might mean you’re missing out on better rates and lower fees.

As your business grows and develops, your business banking needs will also evolve and if you’re transacting regularly small charges can add up, meaning you could be paying a high price for an unsuitable service

  1. Select a transparent, convenient and consistent service

If you’re regularly buying from and selling abroad, fees could soon take a portion of profit from your bottom line. Pick a provider whose fees are transparent and made clear upfront so you can better manage your expenses. Look for a service where rates are consistently good – don’t be lured with teaser offers that expire and leave you trapped or unaware of post introductory fees and charges.

 

  1. Understand the market you’re operating in

Keeping track of currency movements can be easier said than done, so sign up for a reliable rate watch service, like the one provided by FairFX which alerts you when currencies you operate in have moved in your favour. This way you can make international payments when rates give you a commercial advantage.

 

  1. Maintain your standards

The rigorous standards you set for expenses and payments at home don’t stop when your employees pass border control, so find a solution where you are confident in who is spending what. Consider prepaid corporate cards which allow you to transact with competitive exchange rates and top-up in real-time, giving your staff the funds they need to travel for work, providing peace of mind and control over expenditure on a global scale.

 

  1. Watch the way your employees pay

When it comes to travel, regardless of whether your staff are hosting meetings or need to cover the cost of their own accommodation and essentials, make sure you’re in charge of the exchange rate they are using for their payments.

 

The FairFX corporate prepaid card allows staff to pay for expenses with the amount of money you have approved them to spend, whilst you can track and report on spending on the integrated online platform, so there is no reliance on employees using their own payment methods, choosing the exchange rate and fees charged and reclaiming the cost from your business.

 

  1. Benefit from the best rates

Exchange rates fluctuate from day to day with the euro currently 13% lower than before the Brexit referendum announcement, a sum that on a large transfer could make the difference between profit and loss. Consider a forward contract to ensure you can benefit from peak rates by fixing international transactions up to a year in advance.

 

  1. Ask an expert

If you are regularly making international payments it is worth finding an expert to help you with services not offered by your bank to help minimise risk and maximise the return of doing business overseas.

 

  1. Set up a stop loss or limit order

Protect your business against market downturns with the aid of a Stop Loss, which will ensure any losses are limited if you’re aiming for a higher rate and the market takes a turn.

Also consider a Limit Order where you set up ‘target’ exchange rates and ask your currency dealer to process the transaction when the rate you’ve set is achieved to give you certainty over how payments will affect your bottom line.


Ian Stafford-Taylor, CEO
of FairFX said:

“Easy access to international currency at market-leading rates whether travelling abroad or sending and receiving payments is vital for businesses breaking into and operating successfully internationally, especially in a market where rates are constantly fluctuating.

“Many small and medium sized businesses settle for high street bank accounts which can charge extortionate fees for international transactions and offer poor service. The right account and sensible planning could add up to big savings, something that SMEs can ill afford to waste in a competitive marketplace

“As future trade agreements post Brexit become clearer businesses could find themselves with heavy workloads as they adjust the way they operate, so finding a trusted payment provider and reaping every possible benefit when it comes to currency will continue to be crucial for success.”

Duologi
Finance

Specialist finance platform launches to offer 30% sales boost to retail sector

Backed by global investment firm, Oaktree Capital, the company offers merchants the chance to increase their sales, boost customer satisfaction and grow profitability through the delivery of tailored point-of-sale finance options.

Duologi research shows that by providing finance options to customers, merchants can expect to achieve a 30% average uplift in sales, with 57% of shoppers saying they would have bought elsewhere if finance wasn’t available.

In the retail market which – in the past six months alone – has struggled with ongoing store closures and profit uncertainties, the question of consumer spending power is of particular importance. Duologi’s platform allows retailers to offer flexible loans to their customers, from £150-£25,000 on 3-60 month terms; many at a 0% interest rate. Lending decisions are typically made within just four seconds, allowing shoppers to immediately purchase goods, either online or in-store.

Unlike many other similar businesses currently in the market, Duologi does not offer a ‘one size fits all’ model; aiming instead to work with each partner on an individual basis to ensure a bespoke service is created for each. The platform is powered by ground-breaking technology, built from scratch in London, allowing retailers to quickly and simply start offering finance to their customers.

Duologi is led by co-CEOs, John Taylor and Gary Little, who between them count more than 50 years’ consumer lending experience at institutions such as Barclays and Close Brothers. Since launching in September 2017 as a two-man start-up, the business has already secured £100m in annual rolling commitments, with ambitions to have a seven-figure lending book within five years.

 

Gary Little, co-CEO of Duologi, said: “Retail is having a tough time at the moment, so it’s more important than ever that brands set their business apart from competitors and keep up with today’s savvy consumers. Innovative, user-friendly finance solutions can do just that; providing shoppers with the flexibility to purchase items from your store and pay back the cost in a way that suits them.”

 

John Taylor, co-CEO added: “Our vast experience in this industry means that our finance products are backed by decades of expertise and specifically tailored to the way the retail sector works. We look at each business individually in order to create an approach that fits with that particular organisation’s needs.

“There is a whole host of retail brands out there that we can support and add value to, and we are committed to building specialist solutions that will help these businesses deliver robust sales growth and customer loyalty. We are incredibly excited to be launching Duologi and look forward to working hard to create innovative solutions for our partners.”