Whether your startup business is still in the ‘ideas’ phase or has been operational for a short period, the prospect of growth and increased profit margins will be largely dictated by your finances. With company funds allowing startups to recruit, invest in equipment and market their businesses, finding investors early on is advised.
But, how do you find the right startup investor for your business?
In this blog, we highlight some of the most common routes startup businesses go down when looking to raise funds for initial capital.
Friends and family
Over 60% of UK startups use funds raised from friends and family members first. While many are not investors in the traditional sense of the word, the money invested can serve as a much-needed springboard, helping startups get off the ground quickly. Where some family members and friends will ask that their money be returned with no interest paid, savvier peers will ask for a stake in the business or interest paid on the money lent.
Whether it be a startup networking event designed specifically to match investors with entrepreneurs, or a virtual, less formal gathering, events are a great way to pitch startup business ideas and investment opportunities to the right audience.
Accelerator programs offer time-limited business support for cohorts of startups. The aim of these programs, which are run by various private and public organisations, is to get startups ready for investment. As well as hands-on training and business advice, these programs typically offer seed money in exchange for equity in the company.
Crowdfunding is where a startup offers an investment opportunity to a ‘crowd’ of inventors, allowing an unlimited amount of funders to invest a sum of their choosing into their business. The average investment processed via a crowdfunding platform is £100. As startup crowdfunding has increased in popularity, various investment structures have been made possible via this method. While the most common is crowdfunding for money in exchange for equity shares, some platforms allow faceless backers to simply donate to a startup project.
At Lime Advisory, we have supported many new businesses throughout the crowdfunding process, helping create a strategic funding plan, advising on which crowdfunding routes to go down and taking care of all the paperwork that this type of investment deal requires.
The advantages of startup crowdfunding are enormous. From the speed at which businesses can raise funds to the media attention that such campaigns encourage, equity crowdfunding using online platforms is very much the modern way to conduct seed, series A and series B funding rounds.
Find an Angel Investor
Business Angels are wealthy individuals who are looking to invest in exciting businesses. While boasting the cash startups need to scale, Angels also come with knowledge and experience that can prove invaluable to businesses in their infancy. Angel investors can be found in business groups, forums, professional media platforms such as LinkedIn as well as via equity crowdfunding platforms.
At Lime Advisory, we boast a network of investors on our panel, helping investors and entrepreneurs access deals that marry in with their financial goals and vision.
Raise funds with Lime Advisory
Here at Lime Advisory, we boast a great relationship with the UK startup community, having supported hundreds of unique and disruptive brands in their startup missions. From cyber security startups to fintech innovators, we have gained a name for ourselves for supporting startups of all levels and niches.
If you are an entrepreneur and wish to find an investor to accelerate your growth plans, we would be more than happy to help. As part of our work in the funding arena, we provide the following support to startup businesses:
- Building strategies that gain the attention of serious investors
- Creating an investment rationale
- Researching the value of your business and developing a full business valuation should from that data
- Conducting relevant market research to create supporting evidence for your business plan
- Establishing a capital structure that clearly communicates what funds are needed whilst outlining any issues that could impact financial millstones being met
- Supporting and representing you throughout the negotiations phase. This includes attending meetings and responding to any enquiries on your behalf.
- Heading up the SEIS or EIS process
- Managing research and development claims
- Putting in place a scalable group structure
- Ensuring all documentation is signed by the right parties and all tax matters are in line.
Contact us today to discuss your startup funding requirements.