Funding
One of the advice I always give to founders before they go to investors – make sure you are fundable. But what is a fundable business idea? Having been working with startups for more than ten years and supporting them in the fundraising process I summed up these seven questions that could help you understand whether you are ready to raise funds
Can we blame COVID entirely for startups failing or is it the investor system failing them? Stats from Beauhurst show that maybe now isn’t the worst time to be a startup?
This is a question we ponder often at Seed, the readers of Startups Magazine no doubt question and every new Entrepreneur needs to consider. How the hell do you fund this great idea of yours.
In the first part of this series I looked specifically at why women aren’t investing. This time, I’m exploring what’s stopping everyone else.
All hope abandon ye who enter here. If 2020 had a tagline, that would be it. It’s been a rotten year for the startup community. The Coronavirus pandemic has caused unprecedented economic damage, imperilled revenues, and poured cold water on investor confidence.
How much do you know about the Kickstart Scheme that was introduced by the Government in September 2020? If you are a startup or early stage business, my guess would probably be, not very much, but perhaps you are missing out on something that could be very good for your business.
Bored of the adage ‘If you fail to plan, you are planning to fail’? You’re not alone. Sadly, truisms – much like a parent’s advice – tend to be worth heeding. When it comes to funding, it’s best to do it well in advance. Too many companies leave it until there’s a cashflow crunch before acting. As trusted advisers, accountants need to play the role of parent, use their wisdom to identify future funding opportunities, model a couple of scenarios, and help clients find a source of finance that doesn’t leave them with unfavourable terms.
Overall VC investments in 2020 are at par with previous years – but in Q3 2020, venture capital funding for all female founders is on pace for its worst year since 2017 (US data). In the week of Global Women’s Entrepreneurship Day, four of Europe’s top early stage venture funds (Speedinvest, Amplifier, La Famiglia and Redstone) got together to look into the reasons behind the grim statistics and explore what changes need to take place for more female entrepreneurs to get to a term sheet.
One of the top ten reasons why startups fail is lack of financing and investor interest. That is why fundraising is an important part of a startup journey. There are some principles following which might increase your chances for success in closing your next investment round.
During lockdown, the UK Government awarded over £130m of grant funding for Research and Development (R&D) activity to innovative businesses and their collaborators in the United Kingdom. The awardees were from multiple sectors including creative, engineering, digital health, education and sustainable energy.
Historically, startups based in the regions have been 50% less likely to secure funding than those in London. This has created a situation where 72% of all venture capital deals in the UK involve London companies.
Since the launch of London’s Silicon Roundtable in 2008, UK tech startups have enjoyed more than a decade of strong interest from Venture Capitalists (VCs). Spurred on by the success of fast-growth consumer tech companies like Uber or Deliveroo, VCs have sought out startups that could break into the public zeitgeist to become the world’s next big thing. This culminated in more than $13bn being pumped into British technology startups in 2019. Then, the pandemic struck.
The year 2020 is a year like no other. While data shows the pandemic hasn’t affected the overall amount VC dollars invested in tech companies (on par with previous years; US), it has already had a disproportionate effect on the funds allocated to women-led businesses. Venture checks for female founders are at their lowest since 2017. The broader picture is even grimmer, with a real threat to roll back the last 30 years of economic progress for women (according to the International Monetary Fund).
“The grass is always greener…”, there are many catchphrases that describe life and business, but they always seem to be in the future tense and suggest some sort of heroic journey.
When it comes to equity crowdfunding, the go-to platform for any European investor, young company or growth stage business is either Crowdcube, Seedrs, or both. In the first half of 2020, the two platforms topped Beauhurst’s State of UK Crowdfunding report, with similar, impressive performances. Seedrs closed 95 deals and raised £49.7m, while Crowdcube secured 97 deals and generated £48.5m – all throughout the COVID-19 pandemic.
Only one in five women in the UK hold investments… why? In the first of this three-part series I’ll be exploring this question and sharing some of my experience working in the male-dominated world of finance.
Fintech business lender, MarketFinance has secured an additional £50m from one of Israel’s largest asset managers, Viola Credit, to lend to UK SMEs under the HM Treasury and British Business Bank CBILS initiative. The announcement comes as MarketFinance launches a ‘unified application’ process in which SMEs will, through one application, be presented with a variety of finance options and be able to select those best suited to their needs.
For startups, the importance of quality professional advice cannot be overstated. While business owners are quick to seek advice from lawyers and accountants there is considerable resistance to seeking financial advice. A survey conducted by OpenMoney earlier this year, which polled 2,080 adults, provides a worrying insight into how business owners view financial advisers and the advice that they provide. We spoke to Pradeep Oliver, Partner, Cripps Pemberton Greenish who gave us more insight on the topic.
European VC funds are raising a record amount of capital in recent years – $13B in 2018 with over 40% going into funds greater than €250M. Venture is not only a vital source for startup companies to achieve growth and create value through innovation – it is key for the overall economy. In essence, it is a two-sided business, where exceptional founders are matched with capital. While a lot has been said and written about the ‘front’ facing side of the venture industry, how do venture capital firms emerge and raise their funds?
Just as small businesses are the lifeblood of our economy, cash is the beating heart of every SME. But getting cash flow wrong can have devastating consequences, so how can businesses use the fintech industry to protect themselves and create stability in the most uncertain of times?
