Business

Funding Your Start Up - Is Venture Capital Even Still A Thing?

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Business

Funding Your Start Up - Is Venture Capital Even Still A Thing?

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There can be no sweeter sound to the ambitious entrepreneur than venture capital, approved.

But, to anyone who has ever tried pursuing the marriage between ambition and venture capital, most will tell you that the party may have been nice, but the divorce? That was a real...unpleasant experience. (Not intended words).

Look, we’re not going to pretend that having an excited and committed venture capitalist on board with your startup isn’t the sweet spot of business growth. 

Knowing that you have the freedom to manoeuvre through spaces that you might not have had access to otherwise, or having access to people in places that enable decision making in critical areas of growth for you that you might not have otherwise known, well - it’s all very intoxicating.

It is also as rare as hens’ teeth, and far too much of our attention and energy is spent chasing that elusive venture capitalist that comes with their very own magic wand than is worth it. Because unless your startup is the kind of thing that’s going to get the attention of Elon Musk, you’re probably not going to get the VC guy that comes along with it.

So how do you find that allusive romance then? The type of business relationship that will provide you with the money you need to unleash your potential and still offer the kind of support and access you need? Does that business Nirvana even exist anywhere in Britain today?

We went to look for it, here’s what we found.

But it’s not all doom and gloom out there; the reality is far from it. Because as more and more startups that were initially not meant to do anything became something, more people started to take notice and realised the vast amounts of untapped potential that existed in funding opportunities.

“No more romanticizing about how cool it is to be an entrepreneur. It’s a struggle to save your company’s life – and your own skin – every day of the week.” - Spencer Fry, CarbonMade Co-Founder.

In many respects, that is what it’s all about. Before we begin the journey towards finding that finance, we have to say that every trip worth having will likely be peppered with setbacks, stepbacks, and thousands of reasons why pursuing this idea is a spectacularly bad idea. So, let’s begin.

UK GOVERNMENT SCHEMES

The British government has a small business start-up scheme loan that isn’t exactly going to bring the big bucks rolling in, so it’s suited to a particular sort of lender.  £500 - £25 000 is the field you’re plaing in, and you’ll need to submit a detailed business plan.  Interest rates are fixed at 6% per annum, and you’ll be paired with a business mentor. 

That’s probably the best part of this scheme because if you’re really just starting and your idea has reached the five-figure plus range yet, then this could be for you. Visit https://www.startuploans.co.uk/ for more.

If you’re in the business of innovation, then you could find this UK government initiative beneficial.  Innovate UK is an initiative of the British government to provide startup funding sources for companies pursuing innovative solutions to problems faced by ordinary (and not so) people and businesses every day.

Many of the AI companies currently enjoying something of a boom in London found their roots here, so it’s well worth having a look at.

CROWDFUNDING

Here’s what you need to know about crowdfunding: it isn’t going to take you to where you need to be unless you already know how to get there.

Part of the reason we love venture capital partners so much is that not only does that partnership come with cold hard cash, but it comes with mentors and experienced business leaders to help you navigate your way to the top.

This doesn’t. At least not in the way that you may need it to, so if you’re sure that you already know how to get to where you’re going, then give it a try.  Check out https://www.indiegogo.com/ for consumer-based funding or https://www.seedr.cc/ for investor based financing.

PEER-TO-PEER LENDING

Now this is an area of neo finance that we’re really enjoying, and it’s because of its simplicity that we love it. You prepare a proposal, it gets matched to a funder, and off you go. You can always negotiate interest rates and, in many cases, find some good advice from people who’ve been through it before. 

This type of lending came to the fore after the crash of 2008 when businesses had to find ways of accessing lines of credit when those dried up from the banks.

It’s stuck around since then and evolved in a great many exciting ways. https://www.fundingcircle.com/uk/ was the first of its kind to start up in the UK, and they’ve accomplished some inspiring things, so give them a look.

ANGEL INVESTORS

Typically wealthy individuals and usually successful people in their own right, this type of lending have become very popular in the UK of late, with networks that pair like-minded investors with the appropriate opportunities.

They’re often looking for young, innovative and ambitious startups to support and share their experience with - so this is a keeper.  

Angel investor networks often consist of investors that lookout for specific causes like networks of women that support females in startups etc. https://entrepreneurhandbook.co.uk/angel-investment-networks/ for more.

It’s hard to reconcile a burning ambition with an open-ended bank account of zero. But believe us when we tell you, it’s part of the process; all over the United Kingdom, businesses identify needs and supply them - at its essence, it really is that simple.

So, find your niche, your perfect position and use what you have. Suppose you have property space, erect Kit Buildings and rent out the surplus. 

If you have highly developed IT skills, trade them for the type of services you need to produce business solutions on your end - whatever it’s going to take for you to be able to bring something to the table of a future investor is worth doing.

Moreover, if you happen to have that next best thing, well, this link will find you a venture capitalist.

Happy Hunting!

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Funding Your Start Up - Is Venture Capital Even Still A Thing?

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