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We’re delighted to bring you another guest blog from Innovate UK on funding for start ups…

Pooling together the cash you need for your start-up can feel like an almost impossible endeavour, no matter where you’re currently sat in the funding cycle.

You’ll need investment to sustain the longevity of your business – it’s a core part of genuine development and expansion. Appealing to investors and grabbing the funding you need should be a top priority.

With that in mind, we’ve compiled together a list of tricks and tips to help you make the most of your resources and optimise your efforts.
Trying to target potential backers? Or are you just curious as to what’s best for your business? Either way, we’ve got all you need to know down below with our tips to start-up funding.

Outlining Which Funding Stage You’re In

The first step you’ll want to take is evaluating your start up. You’ll need to determine where in the funding cycle you’re currently settled.

Ask key questions about the progress of your business. Are you earning profits from your services and is your product far along in development? Having an awareness of your position will help direct you toward the types of funding you should be pitching for.

Establishing self-reflection with regards to your funding stage is crucial. Those seeking to invest in your vision will want to see an understanding of your own business.

Explain Your Reasons for Funding

You’ll need to understand thoroughly each stage and all of the different requirements they entail. The amount of funding you ask for will need to be appropriate and realistic in relation to your targets and business goals.

Investors will want to see proof of concise, obvious needs for their money. Show them where their funding will be used and how you’ll be making the most of it. Demonstrating a strong pitch and clear direction will make obvious your confidence and personality.

Get to Know Your Target Investors

Investigate those likely to fund your start-up and get to know your target investors.

Being aware of general behaviours and risk appetites of investors at different stages, and the ways in which they differ, will help increase your chances of success. Get clued up, extensively research and familiarise yourself!

More knowledge on who will be looking at your start-up allows for a better grasp on which approach to take. You’ll know how you’re perceived by those that matter and you can adapt accordingly.

Be sure to know your financial needs, business milestones and current progress reports, as these will influence the types of investors you’ll garner interest from. Be conscious of the types you’re appealing to, what’s suitable and what you’re actually asking for.

If you misjudge, it may hinder your efforts!

Timing is Crucial

Monitor your start-up closely and determine which areas need expansion. Find out what you need to do and where in order to move into the next funding stage, as this will make clear the best time to make your pitch to investors.

Successful timing will allow your long-term goals to be met in a sustainable way. You’ll avoid falling short later when new backers
become interested. With sustainable growth, you’ll be able to keep moving from positive to positive long-term!

In need of some more guidance when it comes to business ventures and all things start-up? Be sure to follow Innovate UK on Twitter and subscribe to our YouTube channel for the latest news, tips and advice.

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Having an understanding of your financial performance is vital so you can identify any red flags and make appropriate adjustments. If it’s one thing that can help speed up the process of raising finance, it’s having up to date management information.

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A guest article from Innovate UK…

Establishing a grant can be an extremely attractive option for any business. With over 200 available in the UK, and with many not requiring equity stakes or repayments, it’s an obvious choice when looking for additional funding.

But how do you go about finding the right one for your business and what can you do to help increase your chances of qualifying? We’ve put together some tips and tricks to help you secure your UK grant.

Explore Your Options

You’ll need to look around at all different types of grants in order to find the one that best fits your business. Make sure to be aware of both regional and national opportunities, as some funding is only available for certain geographical locations.

You can view an extensive list of government grants here by choosing your industry type and browsing the available selections. Be aware that some sectors attract more support than others. For example, manufacturing and tech businesses have significant financial interest, and will have a more diverse range of options as a result.

You may also be allowed access to the Regional Growth Fund (RGF) programme. These schemes are run by universities, chambers of commerce and local authorities. Funded through awarded RGF money, they can offer grants or loans to suitable business, and are exceptionally useful for business growth if you are unable to find additional funding from other sources.

Ensure You Are Eligible

There’s nothing worse than wasting time and resources applying for a scheme you have no chance of securing. To avoid later frustration, ensure that you’ve read all grant scheme documents fully and are familiar with the eligibility criteria. Many applications have specific conditions that you’ll need to be aware of.

You’ll also be required to provide information such as your business size, type, previous funding history, reasons for applying and your industry sector. An appreciation of the process is also essential.

Make certain that you’re aware of grants that look to match your investment – you’ll need to have funds in place before applying to these.

Preparation is Paramount

It’s common knowledge that preparation pays off, and grant funding is no exception.

Applications require considerable amounts of information, so you’ll need a strong business plan, realistic sales projections, cash flow and profit/loss forecasts in place before approaching any scheme.

Outline how you’ll meet the requirements of your application. Be detailed and demonstrate a business plan that’s appropriate for the specific grant you’re seeking. Outline what success means for your business and show an extensive understanding of your product and service.

Some grants are time-limited, so apply as quickly as possible to increase your chances of maximum funding.

Be Aware of the Alternatives!

A grant isn’t necessarily the best option for every business. If this is the case, don’t panic! There are plenty of alternatives that can help.

For example, ‘soft’ loans offer lower interest rates and more relaxed terms than other lending options. They can reach a maximum of £25’000 and are government-backed. Often you’ll only need to repay once you’re making a profit, and access to free business support and mentoring is also available.

Useful Schemes and Sites

UK Export Finance is ideal for companies looking to export overseas, providing independent business development and economic advice as well as a range of financing terms.

The Prince’s Trust Enterprise programme focuses on younger applicants aged between 18 and 30. Offering training, mentoring and funding support, it’s worth viewing if you’re in need of backing.

Looking for examples of other businesses and how they approached their grant opportunities? The Small Business website has a wide range of case studies on positive growth from funding and offers guidance, tips and recommendations on how to ensure success.

Innovate UK

For more advice and in-depth discussion, follow Innovate UK on Twitter or subscribe to our YouTube channel.