funding

Funding

The fortunes and finances of every business are different, and you may need to raise finance at any stage.  Nevertheless, it's always the right time to think about funding. Being clear and realistic about the financing you need for current and planned future operations will help attract the investors and partners you need, wherever your business is on its journey:

  • Initial Set-Up: equipment, machinery, office IT and stationery, product development, brand design, legal costs for data protection compliance, sales contracts, website terms, protection of your creations, technology and brand, employee/staff arrangements

  • Operational: ongoing office/premises utilities, employees/contractors, transport/delivery, professional services (IT, legal, accounts and tax etc.), marketing etc.

  • Expansion:  more staff, new markets, new products/services, acquiring new assets etc.

Types of funding 

The main types of funding available are:

  • Grant/donation:  funds you do not need to pay back, although it is likely to be a relatively small amount, and there may well be strings attached, stipulating what the money can be used for (eg R&D, product development, seeking intellectual property protection).   You may find you are required to contribute a percentage of the funding yourself as well.

  • Loan: funds that you will have to repay, or sometimes allow to be converted into shares in your company.  Again, there may be conditions imposed on what the money can be used for, and larger loans in particular may need to be secured against other assets, or guaranteed by one or more company directors.  

  • Equity: if your business is set up as a limited liability company, investors may offer money in return for equity (shares) in your company. This could be at various points on your journey: initial 'seed' funding, or early stage (eg 'Series A') or growth funding (eg 'Series B or C'). If your company really takes off, you may consider an 'initial public offering' (IPO), listing your company on the stock exchange and enabling the public as well as other investors to buy shares.

  • Crowdfunding: many people give a small amount of money in return for  small amount of equity or supply of your new product/service when your business is ready.   

  • Litigation Funding: if your business becomes involved in a court or arbitration dispute (whether you are bringing a claim or defending your business against a claim from someone else), you might be able to find a professional funder who will pay for some or all of the dispute costs (whether you win or lose), in return for a share of any award you may receive if you win. 

 Which funding route?

Even if multiple options may seem attractive, take the time to look into the terms and conditions of each on before devoting too much time to preparing an application, and take a step back to reflect on what you are prepared to commit to:

  • Are you prepared to give up some shares/control in your company in return for the money?

  • How much do you need and how long will you need to pay it back?

  • Does the nature of your business activity, or the number of years you have been trading, narrow the scope of possible options?

  • Is there a large arrangement/application fee, or a requirement for you to invest a certain amount/% yourself?

You may find this helps to focus your thinking and to direct your efforts to the most practicable sources.

Where to get funding

Grants 

  • Try family and friends

  • Innovate UK: for technology R&D, the UK government runs competitions for start-ups to win funding, often done regionally or for specific areas of technology.

  • Innovate2succeed: funding and support for innovation and commercialisation, including intellectual property legal advice on protecting and exploiting your inventions.  

Loans

  • Again, try family and friends

  • Private lenders: banks, individuals, etc.  It is worth researching the potential for business loans with a bank before opening your account with them.

  • Government: the Start Up Loan scheme, run by a subsidiary of the British Business Bank, offers personal loans to start or grow a business, with 12 months of mentoring advice. If you use our link below to apply for a Start Up Loan and you are successful, when Venture Adventures is notified we'll send you a free copy of our Business Workbook!

  • Peer-to-peer: all 'P2P' investors in the UK need to be regulated by the Financial Conduct Authority.  If you have interest from a P2P lender, check they are regulated before proceeding, to minimise the risk that they might fold. Try the self-regulatory body the Peer to Peer Finance Association for more information on members and lending platforms that may help. 

Equity

  • Venture Capital ('VC') investors.  Using your network is a good way to find VC funding.  You could try the British Private Equity & Venture Capital Association: www.bvca.co.uk.

Crowdfunding

  • As with P2P lending, crowdfunding investors taking equity in return must be regulated by the Financial Conduct Authority.  Try the UK Crowdfunding Association for more information on FAC-regulated members and platforms.

  • Other non-equity, non-regulated crowdfunding routes may be appropriate and they can take many forms.  Get searching or contact Venture Adventures - we may be able to connect you with someone who can help.

Litigation Funding

  • This is relatively new area but is becoming increasingly common.   Try the Association of Litigation Funders to find members who have signed up to a code of conduct and may be interested in helping: www.associationoflitigationfunders.com.  

Funding Platform

  • We're delighted to be partnering with Swoop, a business funding and savings platform enabling businesses to discover the right funding solutions across loans, equity and grants, as well as identify ways to easily make savings - all in one fell swoop.  Click on the Funding below button to learn more and get help.

are you investoR ready?

If you are further along on your business journey and perhaps looking to scale up, you need to maximise your chances of success when pitching to lenders or investors.  You need to ensure your business proposition, your story, your financial projections and your presentation are all up to the mark.   If you need help with this, or if you're not sure whether you're 'investor ready,' click below to see if we can help.

other options

There are other avenues to explore that may help, at least indirectly:

Tax Relief

You may be able to obtain tax relief on investment in research and development and on any profits generated from patented technology.  In addition, investors may themselves may be able to obtain significant tax relief on the amounts they put into your business.  See Records, Tax & Reporting for more information.

Insurance

You can insure your business against the risks of becoming involved in disputes that can be a substantial drain on time and resources, as well as a huge range of other risks.  See Risks & Insurance for more information

 

Stretching the Budget

There are things you can do yourself to help set up, grow or boost your business without incurring huge costs or requiring external funding. See our Free/Low Fee page for a few ideas.

Pursue as many of these avenues for funding as you think may be appropriate and interested in your business, and persevere.   In addition, you can click on the button below to submit a request to see if Venture Adventures can help connect you with an appropriate scheme or potential  investor.

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