Study to support investment for the sustainable development of the blue economy : competitive multiple framework service contracts for the provision of studies related to the future development of cohesion policy and the ESI funds (Lot 3) : lessons learned report

The Blue Economy businesses consulted in gathering Lessons Learned have had some success - with varying experiences - in attracting external funding and offer valuable fundraising lessons that can inform the development and implementation of the investment platform. For businesses consulted, across all Blue Economy sectors, the common barrier to accessing public and private funding is perceived as a lack of investor technical expertise both in respect of the sectors and their potential for market growth and for the proposed innovations, in many cases 'cutting edge' and with little or no precedents (making achieving 'proof of concept' a challenging task). Most companies consulted had been successful in securing a level of funding - often up to €2-€3m, first through family, friends and business partners, through business angels (a common route) and small scale grants and loans. Getting to the 'next stage' of business growth is where the problems multiply and the conditions that are generally attached (e.g. the modes valuations expected by private investors) acts as a deterrent, especially for family or entrepreneur owned businesses. Businesses report a gap in the funding market between (approximately) €2/€3m (where many have been successful in raising money to this value) and €15 - €20m, the latter amounts being offered by some investors as a minimum but much more than many businesses actually require, or a loan/debt that can be serviced. EU funding is welcomed but businesses were critical of a perceived lack of flexibility and complex rules and regulations. Time from initial engagement to final receipt of funding is also an issue for nimble and entrepreneurial actors. Timescales and timing were raised as issues, the former the length of time it can take to apply, process and receive funding (especially EU finding such as H2020) and the latter - and not unrelated - the time inputs from the businesses, often by senior staff, including CEOs, and the impact that has on running and developing the business. Some businesses use professional funding advisers but that does not replace the need for time inputs from the business, and can incur additional costs. Many of the businesses consulted had thorough and professional investor propositions, business plans and investor presentations. In many cases, there was a recognition that businesses need to do more, either to professionalise their approach, undertake the necessary research or prepare more thoroughly before seeking external investment, public or private.