Do you have a new and exciting business idea that could change our future lifestyle? Whether it’s coffee, food delivery, however you plan to disrupt the system and improve society, there are plenty of funding options out there for your startup.
But startup funding is NOT a one-size fits all kind of thing. Consider all the options below before honing in on a couple – And if at first you don’t succeed: try, test, and try again. Finding funding is all about what you qualify for and what you’re willing to compromise. For example, if this is your first startup, it may be difficult to get professional investors. These investors typically expect a portion of the business equity and will want to control the funds they provide – This may not be the best option for a fresh entrepreneur. However, things like R&D tax credits are ‘fine-print free’ money that have been put aside to get small businesses off the ground.
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Take Advantage of Government Incentives – Once you’ve gotten your startup off the ground, make sure you’re taking advantage of all government funding opportunities and tax credits: This is money that was set aside for YOU! In the past, people may have thought that investing in startups is a poor use of taxpayer money, but startups are changing our world, making old systems more efficient, creating a new revolution to improve efficiency and make our world function for modern society. This is why plenty of governments provide tax credits for activities like research & development. For example, U.K. businesses conducting in R&D are eligible for up to 33p per £1 spent on these activities.
Crowdfunding – The great thing about crowdfunding is that anyone can participate, no matter how fresh the startup. Incentivise funding by allowing donors to pre-order products or qualify for a reward like a t-shirt or event admittance.
Get A Startup Loan – This is a government backed scheme available to individuals starting or growing a business in the UK. The loans are low interest and successful applicants also receive access to free mentoring from experienced advisors.
Angel Investors – Angel Investors are high-net worth individuals who are interested in funding qualified startups. There are online platforms that you can pitch your startup to Angel Investors, but subscriptions are typically costly. Another option is to network locally, seeking investors that have an interest in your industry or passion.
Venture Capital Investors – Venture Capitalists are professional investors. If you are running your first startup, this may not be the best option if you want to maintain control of your business. If you decide to go down the VC funding route, wait until you’re ready for something big – a couple million pounds or more – and have a proven team that is ready to use that funding to its fullest. To start discussions with VCs, have a proven business model ready to scale and find connections in your network to set up a warm introduction. Don’t get discouraged if the first VC you meet with decides not to move forward with your business – learn from the experience and look for new opportunities. If your idea is that good, it is the VCs lost for not funding you.
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