Source of startup funding

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Guide to sources of finance support for startups

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  • “ Interreg 4b northwest europe update!!!”
  • Source of startup funding

    1. 1. Capital Enterprise Presentation on Funding For Start-ups in London .
    2. 2. Step 1. Know what stage you are on the fundraising cycle Stage Status Pre seed Good Idea, Founder Team are developing a full business plan and completing market research, registering IP and confirming the business opportunity. Seed Opportunity demonstrated. Engage in set-up activities, developing product / service to ‘proof of concept’- market testing. Start up and Series A Launched company-entered market and rapidly approaching break-even sales. Hiring key employees –ready to scale up.
    3. 3. Step 2- Know the different Sources and types of Finance <ul><li>Bootstrapping through Personal resources (time and money = sweat equity you are investing) </li></ul><ul><li>FFF- Family Friends & Fools – People who will give you funds with little questions asked. </li></ul><ul><li>Customers and Suppliers- “ Build slowly at low risk by growing business through profits from supplying customers” </li></ul><ul><li>Loan providers- “ Increase business growth ambitions by incresing investment by taking out debt” </li></ul><ul><ul><li>Banks ( Overdraft-unsecured and secured loans) </li></ul></ul><ul><ul><li>Specialist lenders (Factoring, invoice discounting etc.) </li></ul></ul><ul><li>Investors- </li></ul><ul><ul><li>Private Investors- Business Angels </li></ul></ul><ul><ul><li>Venture capital </li></ul></ul><ul><ul><li>Government Backed Investment Funds </li></ul></ul><ul><li>Matching the right mix of sources to the right stage and type of finance is the key to successful fundraising </li></ul>
    4. 4. Step 3- What do you need Money for? Type Amount Purpose Provider Set-Up- Pre-seed- before trading Varies Up to £100k Get the business set-up- e.g. legal fees, Equipment, website, accommodation Founders ‘bootstrap’, - Sweat Capital, Family & Friends, Personal Loans & Credit Cards. Over 90% of new businesses start-up on less than £10,000 Research & Development Capital ( If doing something new and innovative) Varies Up to £0.5m. Proof of Concept Funding. Market testing Intellectual Property Registration. Time Bootstrap- Finance whilst working elsewhere or as consultant. Private investors alone or in groups. Government Grants/ Tax Incentives e.g. TSB Open Innovation Collaborations with industry/ HEI Definitely not banks Working Capital Varies To fund cashflow cycle (once you have orders) Customers & Suppliers Banks/ Factorers/ Invoice Discounters/ credit cards Scaling up/ Growth Series A Investment 200K- 2m Commercialisation of “proven” technology. Roll out of growth plans Private investors alone or in groups/ dedicated seed funds, specialist VC’s alone or in syndicates. Government Backed funds. VC’s only if more than £1m- below more likely angels.
    5. 5. Step 4: Check out you funding options? <ul><li>Information: </li></ul><ul><li>Capital Enterprise What’s On in London- www.capitalenterprise.org/whats-on </li></ul><ul><li>Business Link - www.businesslink.gov.uk </li></ul><ul><li>Start- up Britain - http://www.startupbritain.org </li></ul><ul><li>British Library- www.bl.uk/bipc </li></ul><ul><li>HMRC Small Company Enterprise Centre- Source of advice and help http://www.hmrc.gov.uk/manuals/vcmmanual/VCM10050.htm </li></ul><ul><li>HMRC R& D Tax Credits www.ucl.ac.uk/advances/advances-news/hmrc </li></ul><ul><li>HMRC Guide & Support- http://capitalenterprise.org/guide-to-rd-tax-credits </li></ul><ul><li>British Business Angel Association: www.bbaa.org.uk </li></ul><ul><li>British Venture Capital Association: www.bvca.co.uk/ </li></ul><ul><li>London Funding Conference: http://www.londonfundingconference.com/about-funding </li></ul><ul><li>Guide to Early Stage Investment: http://www.paloalto.co.uk/about_us/Early_Stage_Investment_by_Alan_Gleeson.pdf </li></ul><ul><li>British Franchise Ass- http://www.thebfa.org </li></ul><ul><li>And if you have not checked them out please look at the latest schedule of advice and training events at : </li></ul><ul><li>www.thebusinessbootcamp.org . </li></ul>
    6. 6. Step 4: Check out you funding options? <ul><li>Networking & Accelerators </li></ul><ul><li>London Technology Network: http://www.ltnetwork.org/ </li></ul><ul><li>Knowledge Transfer Networks: https://ktn.innovateuk.org/web/guest/home </li></ul><ul><li>Mini-Bar: http://www.openbusiness.cc/ </li></ul><ul><li>Lean Camp : http://leanca.mp </li></ul><ul><li>Seed Camp: http:// www.seedcamp.com </li></ul><ul><li>Start-Up Weekend: http:// london.startupweekend.org </li></ul><ul><li>Launch 48: http:// launch48.com </li></ul><ul><li>Tech Hub : http:// www.techhub.com </li></ul><ul><li>The Business Bootcamps- www.thebusinessbootcamp.org </li></ul><ul><li>Innovation Warehouse- http:// www.theiw.org </li></ul><ul><li>Hubventurelabs - http:// hubwestminster.net/hubventurelabs </li></ul><ul><li>Practical Help </li></ul><ul><li>Gateway2Finance- http://www.ufblondon.org/what-is-understanding-finance-for-business?/gateway2finance </li></ul><ul><li>Gateway to Investment http://www.ufblondon.org/what-is-understanding-finance-for-business?/gateway2investment </li></ul><ul><li>UCL Advances-HELO Project ( Student Interns)- http://www.ucl.ac.uk/advances/business/support/helo </li></ul><ul><li>E-Innovate- http://www.gle.co.uk/advice/developing-innovation.php </li></ul><ul><li>Enternships- http:// www.enternships.com </li></ul><ul><li>Enterprise Agencies & Incubators- www.capitalenterprise.org/members </li></ul><ul><li>Mentors Portal- www.mentorsme.co.uk </li></ul>
    7. 7. Step 4: Check out you funding options? <ul><li>Grants & Awards </li></ul><ul><li>J4B- Portal for grant finding http://www.j4b.co.uk </li></ul><ul><li>Technology Strategy Board ( R&D Funding) - http://www.innovateuk.org - http://www.innovateuk.org/content/competition/grant-for-rd-single-business.ashx </li></ul><ul><li>London European Enterprise Network- http://www.een-london.co.uk </li></ul><ul><li>E Funding for SME R&D - http://www.eurostars-eureka.eu/what.do </li></ul><ul><li>EU Funding for R&D collaborations: http://ec.europa.eu/research/participants/portal/page/calls </li></ul><ul><li>Knowledge Transfer Partnerships funding support- http://www.ktponline.org.uk/ktp-what-will-it-cost-my-business </li></ul><ul><li>Translation/ Follow on research funds. </li></ul><ul><li>www.rdfunding.org.uk/bulletin/queries/Search.asp?TheCloseMonth=July&TheYear=2011 . </li></ul><ul><li>http://www.rcuk.ac.uk/kei/ktportal/Pages/Followon.aspx </li></ul><ul><li>https://ktn.innovateuk.org/web/145175/overview </li></ul><ul><li>http://www.wellcome.ac.uk/Funding/Technology-transfer/Awards/Translation-Awards/index.htm </li></ul><ul><li>http://www.bbsrc.ac.uk/business/commercialisation/follow-on-pathfinder.aspx </li></ul><ul><li>http://www.epsrc.ac.uk/funding/grants/business/schemes/Pages/followonfund.aspx </li></ul><ul><li>http://www.nerc.ac.uk/research/programmes/bess/events/ao3.asp </li></ul><ul><li>http://www.nerc.ac.uk/using/schemes/followonfund.asp </li></ul>
    8. 8. Step 4: Check out you funding options? <ul><li>Debt Funding Initiatives </li></ul><ul><li>Enterprise Finance Guarantee ( Government underwriting UK banks business loans- http://www.rbs.co.uk/business/borrowing/g1/firms.ashx </li></ul><ul><li>CDFA ( Soft Loans from Community Banks- http://www.cdfa.org.uk </li></ul><ul><li>Manufacturing Funding- http://www.rbs.co.uk/business/borrowing/g1/manufacturingfund.ashx </li></ul><ul><li>Examples of New types of funding: </li></ul><ul><li>http :// www.marketinvoice.com </li></ul><ul><li>http ://www.fundingcircle.com </li></ul><ul><li>http:// www.thincats.com </li></ul><ul><li>http:// www.firstfunding.org </li></ul><ul><li>Green/ Energy Efficiency loans: http://www.carbontrust.co.uk/cut-carbon-reduce-costs/products-services/financing/pages/financing.aspx </li></ul><ul><li>Incubators ( Discounted accommodation & support) </li></ul><ul><li>Camden Collective ( Creative) - http://camdencollective.co.uk </li></ul><ul><li>Hatton Garden Jewellery Centre- http://www.centa.co.uk/hattonjc.html </li></ul><ul><li>CEME ( Science & Engineering) - http://www.ceme.co.uk </li></ul><ul><li>LBIC (Bio-Tech) - http://www.lbic.com </li></ul><ul><li>Innovation Warehouse- http://www.theiw.org </li></ul>
    9. 9. Step 4: Check out you funding options? <ul><li>Equity Finance </li></ul><ul><li>NESTA - www.nesta.org.uk/investments </li></ul><ul><li>London Business Angels: http:// www.lbangels.co.uk </li></ul><ul><li>London Seed Capital - http://www.londonseedcapital.com/ </li></ul><ul><li>Oxford Early Investments- http:// www.oxei.co.uk/about.php </li></ul><ul><li>Envestors- www.envestors.co.uk </li></ul><ul><li>Paste & Wait Investment (USA only) www.kickstarter.com </li></ul><ul><li>Paste & Wait Investment. www.indiegogo.com </li></ul><ul><li>Crowd funding: http://www.pozible.com </li></ul><ul><li>Crowd Funding : http://www.crowdfunder.co.uk </li></ul><ul><li>Crowdfunding: http://www.crowdcube.com </li></ul><ul><li>Early Stage VC </li></ul><ul><li>Amadeus- http:// www.amadeuscapital.com/about-seed.php </li></ul><ul><li>Balderton- http:// www.balderton.com </li></ul><ul><li>DfJ Esprit - http:// www.dfjesprit.com </li></ul><ul><li>Doughty Hanson- http:// www.doughtyhanson.com/technology-ventures.aspx </li></ul><ul><li>Early Bird Ventures- http:// www.earlybird.com </li></ul><ul><li>Index Ventures- http :// www.indexventures.com </li></ul><ul><li>Octopus- www.octopusventures.com </li></ul><ul><li>Anthemis ( Finance & Technology): http:// www.anthemis.com </li></ul><ul><li>London Technology Fund: www.londontechnologyfund.com </li></ul>
    10. 10. Step 5: So remember –What’s important when seeking finance <ul><li>The quality and “connections” of the management team </li></ul><ul><li>The size of the business opportunity/ funding need </li></ul><ul><li>The scope for building a sustainable competitive advantage </li></ul><ul><li>The level of risk/ security. </li></ul><ul><li>And the timeliness of the proposal </li></ul><ul><li>Will determine the attractiveness of your business to investors, </li></ul><ul><li>lenders and funders </li></ul><ul><li>The ability of the entrepreneur to negotiate well and of the team to execute the business plan convincingly </li></ul><ul><li>Will determine the type, price and quality of the deal that can be achieved </li></ul>

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