GIVING CREDIT TO INNOVATION: THE QUANTIUS STORY 2

Transcript:GIVING CREDIT TO INNOVATION: THE QUANTIUS STORY 2:
GIVING CREDIT TO INNOVATION: THE QUANTIUS STORY 2 Source: Intangible Asset Market Value Study, Ocean Tomo, September 2017 In 1975, 17% of the value of the S&P 500 could be attributed to intangible assets. By 1985, that number jumped to 32%. By 1995, it swelled to 68%. By 2015, 84% of the value of the S&P 500 could be attributed to intangible assets. In 1975, a young man founded a company built on intangibles. Today, this is what he has to say… “It took time for the investment world to embrace companies built on intangible assets. In the early days, I felt like I was explaining something completely foreign to people. Our business plan involved a different way of looking at assets than investors were used to. They couldn’t imagine what returns we would generate over the long term.” - Bill Gates 3 Source: https://www.gatesnotes.com/Books/Capitalism-Without-Capital In 2015, we came together to take up Bill’s beef. 4 He worked all over the world and wanted to build great Canadian companies… HASSAN KHAN Founder & Chair 20+ years in Tech, Consulting and Strategy|Canadian Armed Forces (Afghanistan) | McKinsey She grew and operated tech companies and saw so much capital inefficiency… LALLY REMENTILLA President & CFO 25+ years in Financial Leadership and Investing | Lucent | Lavalife | Nulogy| Creative Destruction Lab| Pique Ventures | Ontario Scale-Up Voucher Program | Grand Challenges Canada | CPA, CMA | MBA York University He started an asset-based lender and now wants to see companies grow… LEN KOFMAN Chief Credit Officer 15+ years in Credit Risk, Commercial Banking and Corporate Finance| Bank of Montreal | Sun Life Financial | Bridging Finance We looked at the Canadian market and this is what we found… 5 THERE IS A LARGE MARKET FOR SME CREDIT AND IT IS SEVERELY UNDERSERVED CANADIAN LANDSCAPE1 LENDING SUPPLY MICRO COMPANY SIZE NUMBER OF COMPANIES SOURCE OF CAPITAL EQUITY PARTICIPATION ALL IN COST CAPITAL SMALL MEDIUM LARGE 1,000,000 120,000 20,000 2,000 BANKS CURRENT MARKET INEFFICIENCY TYPICAL NON-BANK LENDERS EQUITY INVESTORS NON-DILUTIVE NON-DILUTIVE DILUTIVE HIGHLY DILUTIVE 4-8% 11-17% 18-25% 25%+ Note 1: Micro: <20 Full-time employees (“FTEs”), Small: 20-99 FTEs, Medium: 100-499 FTEs, Large: 499+ FTEs Note 2: BDC 2011 Survey on Financing and Growth of SMEs Sources: Industry Canada, Statistics Canada, Business Development Bank of Canada QUANTIUS TARGET MARKET ~10,000 of these 80,000 creditworthy and growing SMEs are rich in intellectual property and intangible assets