‘Where to find sources of seed funding to propel your business’ was the title of the questions and answers session held in the ‘Get Funding’ room of innovate 2015.
Ian Merricks was chair with a panel of well-known industry experts discussing the different types of funding available for business, how they are accessed and when.
The panel included:
Andrew Muir, Investment Director, Midven; Martin Walton, CEO, Arthurian Life Science ;Tim Mills, Director, British Business Bank; Debbie Buckley-Golder, Head of Research Engagement, Innovate UK.
Firstly, Ian did a good job of getting the conversation started by discussing a well thought out and prepared slide covering the types of funding available, amounts and where you might go to access these funds. Unfortunately I was unable to get a good picture of the slide, as the light conditions were poor; that said, I did sketch down some of the detail and as a general rule of thumb feel that this would be useful information for entrepreneurs and organisations looking for funding:
Moving past the introductions Ian kept the debate upbeat and relevant. Some very interesting do’s and don’ts were discussed by the panel concerning start up seeking investment. They included:
- Do a lot of research first before going in front of any potential investor.
- Innovate UK should be one of the first stops you make.
- Be careful when selecting a VC or Business Angel. It is a two way relationship. You need to be able to get on with them.
- Think big picture, a smaller part of a bigger pie is better than a large part of a small one. In essence, when talking to investors you need to be prepared to strike the right deal.
- All this said, customers are the best way to fund your business. First of all look to partnerships with customers and ensure to work your payment terms to your advantage.
Some very sound advice. As with all things it pays to get professional support when looking to drastically change the ownership within an organisation. The relatively small investment in a Financial Director or Non-Executive Director with experience can make all the difference in whether you are successful in getting funds, how much and what conditions are attached. One thing is for sure, the process of getting funding is time consuming; give this some thought when planning. There is no point in winning a VC over if by the time the deal is done the company is on a downward spiral, due to time preparing glossy literature.
One piece of advice I offer is to think carefully about each element of the deal and know your ‘Walk Away’ point; that is ‘the point at which you are prepared to do a deal, or not. This should be grounded in reality; I find point 4 very poignant, all the above options want you to succeed and BIG. They will not invest in you if they can’t see a good return.
Entering into negotiations thinking “they need me more than I need them.” is totally wrong. Enter with a positive attitude, know your requirement, your limits and your concessions you are prepared to make. And one last thing, don’t be afraid to say “I need time to think things through” if a deal goes in unanticipated direction.
Nigel Stone – November 2015
*All comments are based on my personal experiences and given freely. That said, you need to make your own choices. I can’t and won’t accept liability for you employing any recommendations. Business is all about risk. It’s your choice.
Nigel stone has, over the last fifteen years, started, led, consulted and nurtured both UK and European businesses to achieve quite outstanding results.