Driving growth: how to get your early-stage business investment ready
The beginnings of an investment journey
What does the funding journey look like?
Over the last 12 months we have witnessed a digital revolution and this has raised the profile of tech- enabled businesses well above the parapet. For many businesses, lockdowns, social distancing and the overnight switch to remote working all contributed to a rapid transition to a new digital way of life. While this undoubtedly took time for people to adapt and get used to, it created a huge opportunity. The pandemic instigated a level of change that may have otherwise taken five to 10 years to reach, and it shone a spotlight on those businesses that were able to support and accelerate this journey. In some sectors, innovation and collaboration were fast-tracked. Businesses are now innovating at speed, creating new products and services on a scale that’s never been seen before. For example, PropTech which has utilised the introduction of the internet of things (IoT), artificial intelligence (AI) and virtual reality (VR), impacting the way in which real estate is managed. There’s also the transformation of the WorkTech sector with the increase in use of technologies such as Zoom and Microsoft Teams to support those working from home, whereas industries such as FinTech have responded to entire populations going cashless and supported an accelerated move to digital payments that could be delivered securely. The common factors within all of these industries is the advent of technology and the unprecedented pace of change. The pandemic has truly put tech-enabled businesses in the spotlight and while it has not always been smooth sailing for all businesses, it has presented an opportunity for early-stage businesses to capitalise on investor appetite and drive growth. However, that is often easier said than done. Many entrepreneurs are specialists by background and operate within small teams, if not alone. They have the passion and technical understanding of their operations and products, but often need a partner with the business and financial acumen to help increase bandwidth, propel their business to the next stage, and connect with a broader customer base. This is particularly true of early-stage companies, but the funding gap in the UK means these partners can often be difficult to find. There is no central directory of investors, and with a range of options available for early-stage companies, it can often be easier to raise £10 million than it is to raise that first £1 million. This means it’s vital that support is given to businesses to ensure they can find the equity to help them move from concept to commercialisation and beyond.
Every business needs capital to begin operating, through the lifecycle of any organisation, its funding needs will change. Alongside this, it’s likely that its investors will too. To begin with, most start-ups are funded through personal savings and contributions from friends and family. This is often referred to as ‘pre-seed’ funding. It refers to the investment that is needed to get the business off the ground. As the opportunity for the business to commercialise and scale increases, its funding requirements change. And it’s here where equity funding, or seed funding, first comes into play. A typical funding journey will demonstrate the complexity of the market – from angel investors and crowd funding through to the Enterprise Investment Scheme (EIS) and private equity investors. The pools of capital available for businesses varies depending upon the stage they are at, and while it can appear complex this can be demystified with the right advice.
Every business needs capital to begin operating, through the lifecycle of any organisation, its funding needs will change. Alongside this, it’s likely that its investors will too. Heath Snyder Corporate Finance
Over the last 12 months we have witnessed a digital revolution and this has raised the profile of tech-enabled businesses well above the parapet. Alex Starling Corporate Finance
frpadvisory.com
frpadvisory.com
5
4
Made with FlippingBook - professional solution for displaying marketing and sales documents online