Funding

We are entering a new phase of climate-aligned investing. At COP26 last month, green investment was a cornerstone of conversation and debate, with innovation and technology highlighted as crucial mechanisms for tackling climate change. Now – more than ever – investment communities of all shapes and sizes are expected to back startups that are not only committed to sustainability and a zero-carbon economy, but are also using innovation to actively solve the climate crisis.

Launching a startup is one of the most challenging steps you’re going to take in your professional life. But it will be worth it if you play your cards right. Without a doubt, the COVID-19 pandemic has had a major impact on the way SMBs operate, but as a startup you need to consider many other challenges that lie between you and long-term success.

In the new digital economy, the rapid growth of cloud software is hardly surprising. In the aftershock of the pandemic, as hybrid working practices remain as prevalent as ever, companies face a critical need to enable staff to access data safely, without necessarily needing to return to the office. Elsewhere, organisations will be looking to cut costs, and store information safely with additional flexibility.

When it comes to considering how best to raise pre-seed or seed finance for your business, one of the most commonly asked questions is whether getting investment from business angels or crowdfunding would be better. It could be argued that business angels are just much wealthier versions of people that invest on crowdfunding platforms. As such, in reality it is more a case of a small number of angels can replace a much larger crowd.

Having decided that you want to scale your business and that you need more money to do this properly, you will then need to carefully consider all the different options available and make sure that you get the best funding and from the best source.

HMRC’s recently-released annual Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) statistics made for interesting reading. While the 2019/2020 numbers don’t offer a full account of Covid-19’s impact on the market, funding from EIS rose to £1.905bn – up from £1.867bn in 2018/2019 – with SEIS funding marginally down, from £171m in 2018/2019 to £170m in 2019/2020. Combined, EIS and SEIS have now helped over 45,000 startups receive over £25bn in funding. A testament not only to the two schemes, but to the UK’s entrepreneurial spirit.

The COVID-19 pandemic has steered the banking industry worldwide towards digital transformation. Traditional financial services became redundant overnight leading to a historic rise in the adoption of fintech platforms across the world. Cashless payments became more popular due to the need to lead our daily lives in a contactless manner.

Although revenue-based financing has many benefits and in-built flexibility, founders should be assessing its suitability once they considered all the aspects of the product and the lender.

End of last year, I ran a session for founders on raising early-stage investment.  At the beginning of the session, I asked the audience to walk me through an outline of the stages involved when engaging an investor. One of the responses I received was, ‘you pitch the business…then if there is interest you present and discuss the financial model.’ I then asked a second question. When do you use ‘storytelling’? Several responses came in via messaging, ‘the pitch’. Which is correct, but it is not the only stage where it is used.

We don’t often address mental health in male-domintated sectors, despite well-being becoming a more accepted topic in mainstream media. There is a lingering macho stoicism surrounding the conversation about the toll that raising capital can take on business leaders, which is perhaps no wonder in a field where the pursuit of work-life balance is seen as a weakness.

The values of tech companies are skyrocketing, and generally outperforming the rest of the market. With plenty of cash looking for a sound home in growing businesses, the time is now for tech companies. So, how can they bag the best investors to back their technology?

Early Stage investors can often seem like mythical animals hidden in parts of the city you have little access to. When you do finally catch yourself face to face in a crowded networking event, or on a brief phone call that you’ve been preparing for all week, it can often feel like an uncomfortably one-sided encounter.