The Neoponic debenture scheme is a way for CIDA to invest time and resources into new businesses without charging for the service upfront.
We do not want to force small organisations into premature decisions on sharing equity or shares in your organisation at such an early stage in the company’s development. But we do need to make a return on our investment for re-investment in other developing businesses.
The Debenture scheme is our solution. It is more like a development loan – we do not own shares in your organisation!
Benefits of the Neoponic Debenture:
- No release of equity or shares to CIDA
- We have no say in the management or running of your organisation
- We have no say in the sale of your business should you choose to sell
- Interest free investment in your business
Debenture Levels
Year 1 - £1000 over 12 months or 4% of turnover/sale value whichever is the greater.
Year 2 - £2000 over 24 months or 2.5% of turnover/sale value whichever is the greater.
Year 3 – £3000 over 36 months 1.5% of turnover/sale value whichever is the greater.
(Turnover is cumulative)
The investment received is as follows
- Discounted desk space with no utility charges whatsoever
- Free 1-2-1 Business advice
- Free telephone calls
- Free photocopier
- Free meeting rooms
- Free call handling (should you require it)
- Marketing and promotional support
- Free CIDA Membership worth £200 a year
We expect most of our businesses to have outgrown the space within 24 months but leases are offered on a 12 month rolling basis.
The debenture is triggered either on leaving the Neoponic incubator space or sale of your business. To better understand the way the Debenture works here a few basic examples:
Imagine selling your company to Joe Bloggs for £20k after 3 years of trading from the Neoponic hub. CIDA would in this case receive a payment of £300 (1.5% of 20k) but as this is less than the minimum cost for 3 Years in Neoponic the payment would be scaled up to £3000
Or
If you planned to leave Neoponic after 24 months to lease your own space and your organisation turned over £50k in Year 1 and £40k in Year 2 CIDA would receive £2250. As this is more than the minimum payment it will not be adjusted.
It is possible to arrange instalment payments of this amount via Direct Debit if cash flow is an issue. In some instances CIDA may be able to offer a deferred settlement of the Debenture. For more information, please email or call us on 020 247 4710.
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