4. • Bootstrapping through Personal resources (time and money = sweat equity you are investing)
• FFF- Family Friends & Fools – People who will give you funds with little questions
askedincluding reward based crowd funders such as Peoplefundit.
• Government Grants
• Customers and Suppliers- “Build slowly at low risk by obtain credit from suppliers and
growing business through profits from paying customers”
• Loan providers- “Increase business growth ambitionsby increasing investment by taking out
debt”
– Banks ( Overdraft-unsecured and secured loans)
– Community Finance Institutions ( Soft/ unsecured loans for riskier ventures)
– Leasing Companies.
– Invoice lenders (Factoring, invoice discounting)
– New loan markets such as Market Invoice and Funding Circle.
• Investors-
– Private Investors- Business Angels such as Angel Capital
– Venture Capitalist
– Crowdcube
– Government Backed Investment Funds
Matching the right mix of sources to the right stage and type of finance is the key to successful
fundraising
www.ngfc.org.uk
5. You can’t a business loan from a bank because?
Banks only make a margin on loans of between 2-7% -so they can only afford very low default rates and
this means they will not lend to a business or entrepreneur that is deemed “risky”. And you are deemed
an unacceptable risk if:
1. You have a bad credit history
2. Failure rate in you business sector is high
3. You have no confirmed customer invoices- no evidence of sales = no evidence you can re-pay the
loan
4. The business has no trading history – difficult to get a loan unless been trading for over 6 months
5. You are unable to offer security to cover the bank if the business fails.
6. Your customers are overseas –so there is a risk they cannot be legally forced to pay for goods
ordered.
7. What you want to do with the borrowed money is widely regarded as having a poor success rate
e.g. Research and developing a new product and especially marketing.
If any of the above applies to you then look at the Next Generation Finance
Consortium Members.
www.ngfc.org.uk
6. Step 3- Match the funding need to purpose?
www.ngfc.org.uk
7. Where do NGFC Figure 1. 4 Steps to developing a high
growth business. ( Source HBR)
members fit
www.ngfc.org.uk
8. NGFC Member Funding Match- Where & When we can help.
Capital Enterprise can help early stage entrepreneurs sources of “proof of concept”
funding ( including R&D grants) and help entrepreneurs to develop scalable business
models and plans.
Peoplefund it can help early stage businesses raise funds to develop and test proto-
types and fund market launches.
CDFA members & North London Community Finance can help pre-revenue
entrepreneurs raise small loans (£5-10K) to launch a business and provide income
generating growing businesses larger ( £10-25K) unsecured loans to fund cash-flow
Crowdcube can help scalable businesses with some to market validation to raise
seed funding ( £50K+ )from a “ crowd” of small investors.
Angel Capital is looking to use the Seed Enterprise Investment Scheme to help raise
£100-150K for entrepreneurs with proven scalable business models. Angel Capital
can also help raise up to £1m for scalable businesses with proven management
teams
Market Invoice has a market of lenders willing to issue relatively cheap loans to
companies needing cash to fund individual confirmed orders including those from
overseas. www.ngfc.org.uk
9. Information:
• Capital Enterprise What’s On in London- www.capitalenterprise.org/whats-on
• Business Link - www.businesslink.gov.uk
• Start- up Britain - http://www.startupbritain.org
• British Library- www.bl.uk/bipc
• HMRC Small Company Enterprise Centre- Source of advice and help
http://www.hmrc.gov.uk/manuals/vcmmanual/VCM10050.htm
• HMRC R& D Tax Credits www.ucl.ac.uk/advances/advances-news/hmrc
• HMRC Guide & Support- http://capitalenterprise.org/guide-to-rd-tax-credits
• British Business Angel Association: www.bbaa.org.uk
• Guide to Early Stage Investment:
http://www.paloalto.co.uk/about_us/Early_Stage_Investment_by_Alan_Gleeson.pdf
• Guide to 100 offers for start-ups – www.capitalenterprise.org
And if you have not checked them out please look at the latest schedule of advice and training events at :
www.ngfc.org.uk .
www.ngfc.org.uk
10. Need less than £10K to start?
Grant-
www.j4b.co.uk
No Funds
New Enterprise
Unemployed?
Allowance Scheme
Need Less than
£10K to Launch a Self Fund
business Community
Development
Write a simple Finance Institution
Borrow Business Plan & 12
month cashflow
Bank
- Sources of Grants- www.j4b.co.uk
- Competition funding £1000 issued to 10+ businesses per month- http://www.shell-livewire.org
- Princes Trust http://www.princes-trust.org.uk/need_help/enterprise_programme.aspx
- New Enterprise Allowance Scheme – Check who delivers the scheme in London by e-mailing Capital Enterprise.
- Community Development Finance Associations- http://www.cdfa.org.uk - Also check out North London Community Finance
- ELSBC Access to Finance – Business Plan support for those looking to raise up to £10K
www.ngfc.org.uk
11. Sources of Finance for those looking to start and
grow a scalable business ?
( i.e. need more than £10K?)
www.ngfc.org.uk
12. Getting ready for finance?
Accelerators : Training & Mentoring programmes that provide fast-track to seed funding for scalable
new businesses
• Lean Camp : http://leanca.mp
• Seed Camp: http://www.seedcamp.com
• Start-Up Weekend: http://london.startupweekend.org
• Launch 48: http://launch48.com
• Tech Hub : http://www.techhub.com
• The Business Bootcamps- www.thebusinessbootcamp.org
• Accelerator Academy- http://acceleratoracademy.com
• Innovation Warehouse- http://www.theiw.org
• Hubventurelabs - http://hubwestminster.net/hubventurelabs
Practical Help with Accessing Finance and Business Planning
• CEME Gateway to Investment Service
• Enterprise Enfield- Invest in Success
• Prevista –Raising Finance Service
• UCL Advances-HELO Project ( Student Interns)- http://www.ucl.ac.uk/advances/business/support/helo
• E-Innovate- http://www.gle.co.uk/advice/developing-innovation.php
• Enternships- http://www.enternships.com
• Enterprise Agencies offering 1-2-1 support- www.capitalenterprise.org/members
• Mentors Portal- www.mentorsme.co.uk
www.ngfc.org.uk
13. Looking to Borrow from an alternative to traditional
banks and finance providers ?
Debt Funding Initiatives- Trading Businesses Only
• CDFA ( Soft Loans from Community Finance Institutions willing to provide unsecured loans to trading
businesses who banks are unlikely to fund)- http://www.cdfa.org.uk
- Frederick Foundation- http://www.fredericksfoundation.org
- East London Small Business Centre- www.goeast.org
- North London Community Finance- http://www.northlondoncommunityfinance.org/
• Enterprise Finance Guarantee ( Government underwriting UK banks business loans so SME’s can get
unsecured loans) http://www.rbs.co.uk/business/borrowing/g1/firms.ashx
• Examples of New types of funding:
• http://www.marketinvoice.com- : Need to fund an export order, government contract or orders from late
paying large customers then check out this new and very cheap source of funding.
• http://www.fundingcircle.com
• Green/ Energy Efficiency loans: http://www.carbontrust.co.uk/cut-carbon-reduce-costs/products-
services/financing/pages/financing.aspx
www.ngfc.org.uk
14. Looking for investment?
Crowd funders-
Crowd Cube: http://www.crowdcube.com– The UK site for those looking to raise investment (£20K-£1m)from
a “crowd” of small investors.
Business Angels-
• London Business Angels: http://www.lbangels.co.uk
• London Seed Capital - http://www.londonseedcapital.com/
• NESTA - www.nesta.org.uk/investments
• Start-up funding club- http://www.startupfundingclub.com
• Oxford Early Investments- http://www.oxei.co.uk/about.php
• Envestors- www.envestors.co.uk
Early Stage Venture Capital Firms
• Amadeus- http://www.amadeuscapital.com/about-seed.php
• Balderton- http://www.balderton.com
• DfJ Esprit - http://www.dfjesprit.com
• Doughty Hanson- http://www.doughtyhanson.com/technology-ventures.aspx
• Early Bird Ventures- http://www.earlybird.com
• Index Ventures- http://www.indexventures.com
• Octopus- www.octopusventures.com
www.ngfc.org.uk
15. SEIS- Tax breaks to encourage investment in start-ups
Seed Enterprise Investment Scheme-SEIS is a tax break launched in April 2012 for UK
tax payers to encourage them to buy shares in start-up companies registered in the
UK
The Facts:
• SEIS investors can input £100,000 in a single tax year rising to a maximum £150,000 over two
or more tax years in to a single company
• Investors cannot control the company receiving their capital
• Investors pick up 50% tax relief in the tax year the investment is made, regardless of their
marginal rate.
• In the 2012-13 tax year, tax payers can roll any chargeable gain in the tax year in to a SEIS
with a full capital gains tax exemption (another 28%)
• The business must be a start-up company -registered in the UK within 2 years of claim.
• The company must not employ more than 25 workers.
• The company must have assets of less than £200,000.
• The company has to trade in an approved sector – generally not in finance or investment, for
example, a property company raise capital as a SEIS.
www.ngfc.org.uk
16. Looking for funding to turn your idea into a proto-type
product/ service ?
Grants & Awards
• J4B- Portal for grant finding http://www.j4b.co.uk
• Technology Strategy Board ( R&D Funding) - http://www.innovateuk.org -
http://www.innovateuk.org/content/competition/grant-for-rd-single-business.ashx
• E Funding for SME R&D - http://www.eurostars-eureka.eu/what.do
• EU Funding for R&D collaborations: http://ec.europa.eu/research/participants/portal/page/calls
• Knowledge Transfer Partnerships funding support- http://www.ktponline.org.uk/ktp-what-will-it-cost-
my-business
Translation/ Follow on research funds.
• www.rdfunding.org.uk/bulletin/queries/Search.asp?TheCloseMonth=July&TheYear=2011.
• http://www.rcuk.ac.uk/kei/ktportal/Pages/Followon.aspx
• https://ktn.innovateuk.org/web/145175/overview
• http://www.wellcome.ac.uk/Funding/Technology-transfer/Awards/Translation-Awards/index.htm
Crowdfunding Platforms-
Peoplefund.it – will help you to raise funding to build a proto-type and market test a great idea or product.-
www.peoplefundit.org
www.ngfc.org.uk
17. New Initiative’s launched in 2012.
• The CISCO Big Awards- Come up with a great business idea and win £200,000
https://www.thebigawards.co.uk
• Dreamstake- launch of their accelerator platform on the 22nd March
http://www.thebusinessbootcamp.org/pivot-party-dreamstake
• Green Accelerator – led by well- known Green Entrepreneur James Cann -
http://bertiinvestments.com/berti-green-accelerator/
• TECH- There are also a few impressive pitching for investment events coming up
for tech entrepreneurs.
– http://innotechsummit.com/
– http://www.globalcorporateventuring.com/article.php/3265/tech-scout-awards-and-
symposium-14-15-may-2012?mgs1=15d975st0T
www.ngfc.org.uk
18. Step 5: So remember –What’s important
when seeking finance
• The quality and “connections” of the management team
• The size of the business opportunity/ funding need
• The scope for building a sustainable competitive advantage
• The level of risk/ security.
• And the timeliness of the proposal
Will determine the attractiveness of your business to investors,
lenders and funders
• The ability of the entrepreneur to negotiate well and of the team to
execute the business plan convincingly-
Will determine the type, price and quality of the deal that can be achieved
www.ngfc.org.uk