Escalator scheme: 21 deals pending

By ELLEN READ

A Government-funded scheme to help small businesses become "investment ready" has 21 deals pending.

The Escalator programme, set up late last year, targets small but growing companies looking for investors or strategic partnerships.

Accredited providers teach the businesses about investment options available to them (eg joint venture, venture capital) and aim to get them to the stage of completing a major investment deal.

Programme manager Matt McKendry said the companies ranged from niche manufacturing to biotech and food businesses.

He said one of the biggest hurdles identified by businesses was understanding what deals were possible and how to choose which solutions would create the best-long term growth - whether venture capital or through strategic partnerships and licensing.

With this in mind, the Escalator programme offers a specialist help desk; assessments of a business or concept and its investment potential at various stages; investment-specific workshops at two levels; and brokering expertise to help raise up to $5 million capital (no lower limit exists) or to develop strategic partnerships.

It is aimed at entrepreneurs or businesses looking to raise equity or broker a deal within two years. Participating companies are likely to have high growth potential, typically driven by exports, and may be at concept stage through to a significant expansion phase.

Escalator's point of difference from other courses aimed at helping small businesses grow was that it focused on signing the deal rather than on product or service development, McKendry said.

This was because while most companies knew how to progress their product or service development, many needed help with securing a deal to expand their business.

"If they do it badly then it takes them a long time to recover and can be very bad for business," he said.

In its early days the programme focused on equity deals but this has been expanded to include strategic alliances and licensing deals.

John Cunningham of Ignition Partners ran the country's first Escalator workshop in conjunction with Enterprise North Shore. "We had a range of businesses, but almost all had export as their main area of growth," he said.

Some of the companies from the initial workshop are now involved in further Escalator assessments with a view to deal broking.

Escalator