Here we aim to demystify funding for those new to the process – what this is, whether / what / how much you need, and how to get started
Introduction
Unless like Jaime Laing you have a McVities empire of wealth to build on, there is a high chance you will be looking for financing to support your business as it grows. There are many financing options for small businesses, from traditional bank loans to alternative loans, business credit cards, factoring services, crowdfunding and venture capital. With the selection available, it can be difficult to easily get to grips with what they mean and determine which option is right for you and your business.
The first thing to know is that there are two broad categories of financing available to businesses: debt and equity. Figuring out which avenue is right for your business can be confusing, and each option has its own set of pros and cons. Check out a helpful guide here.
Fundraising FAQs
Raising investment can feel like a bit of a minefield, especially for the uninitiated! Don’t worry, we’ve got you covered. Here are some common questions, to get you started.
An article from Enter the Arena will help answers these initial questions, and is written with female entrepreneurs in mind:
- Do I need to raise investment?
- How do I improve my chances of a successful fundraise?
- What are the 5-steps to raising investment?
- How do I know if my business will be of interest to investors?
- Is it harder to raise investment as a female founder?
- How long does it take to raise investment?
- Where do I start?
UKBAA prepared a helpful guide to give you a better understanding of how early stage investment works and whether it is actually right for you in the first place. The guide covers the following:
- At what stage should I secure investment?
- Size and shape of seed investment
- How much do Seed Investors invest in a business?
- Different sources of funding
- How does angel investing differ from VC Investing?
- How much equity do you typically need to offer in return for funding?
UKBAA also set out a process that you should go through to get your business ready to attract and engage an investor, and finally will give you some helpful tips about where to find investors and how to ultimately close a funding round.
Investment Readiness
Are you ready to raise investment? How can you tell and what to do next? These resources can help you take the next step.
- When is my venture ‘investment-ready’? – advice by Oxford Foundry Start-Up School
- Female-founder ‘investability’ scorecard – 10min questionnaire from Enter the Arena
Funding Options for Early Stage Ventures
There are many different types and sources of funding – resources below will help you understand what they are and which may suit your venture best (if you are not already familiar!)
- Essential guide to start-up funding stages – by Innovate UK
- Startup funding in the UK – an overview by GrantTree (who focus on grant funding) covering both equity and debt, including crowdfunding, government funding, incubators, angel, and venture capital funding, with helpful examples of each
- The complete guide to startup & scaleup funding in the UK – a very comprehensive overview of the options, and providers of these, from Fundsquire (who focus on R&D funding) – if you would like to explore these more in depth!
- Debt vs Equity – a jargon-free guide from finnCap to help you understand the differences and decide which one is best for you
- Funding search and learn tool – a very helpful tool by the British Business Bank to help you identify sources of funding that fit your business requirements (sector, stage, size, use of capital) and help you choose (even includes pros and cons)
Funding Best Practice
Some sources to help you up your fundraising game!
- Writing a robust business plan – a guide from the British Business Bank on how to write a business plan to help you secure funding
- Delivering a great pitch – a guide by finnCap on how to prepare and deliver a successful pitch to investors, to help get your business the funding it deserves
- Best practice getting funded – tips from the Oxford Foundry Start-up School covering common pitfalls and things to consider when negotiating terms
Funders
A list of providers of finance and organisations that provide startups access funding – now that you know what you want, and are ready to ask for what you deserve!
- Small business grants guide – a great guide by the British Business Bank to finding and getting a government grant for your new business, of the hundreds of government grants available for small businesses to save you money, lower start up costs and help grow your business
- Public funding and support search tool – a very helpful tool by Gov.uk based on your requirements (sector/industry, size, stage, region, funding type preference), covers funding by government and non-for-profit organisations along with providers of advice
- Funding and support programs tool – another comprehensive search tool, this one provided by the ScaleUp Institute and covers private and public sources of funding, along with a broad range of support programs – including a list of those vetted and endorsed by the ScaleUp Institute
- Check out an article by the ScaleUp Institute team explaining their mission and resources they offer
- The Ultimate Rolodex – an interactive list of funders and funding platforms we put together to match you and the right partner based on the type and maturity of your business. We have included signatories of Invest in Women code and SME finance charter who are committed to help you succeed.
