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Serial investor’s top tips for start-ups looking for funding in the UK

10th Jan 19 2:43 pm

There isn’t much I haven’t seen in business. Having been involved for 20-years with running my own and funding others’ businesses, I’ve been fortunate enough to be a part of launching, growing, scaling and turning around a large number of companies.

The one question I get asked the most, particularly on social media these days, comes from hungry entrepreneurs with a start-up business asking ‘how do I go about getting funded?’

My top tips for start-ups looking for funding in the UK are as follows

1. Network, network, network.

This one is massive for me, and networking has played a huge part in every business I’ve ever been involved in. If you’re serious about making your business work, you need to know as many people as possible who can help you on the journey.

Nobody on the planet will have anywhere near as much drive, passion and energy for your product or service as you will, so get out there yourself and start meeting people.

It’s surprising who you will be introduced to, recommended to or pointed in the direction of, once you start getting out there and speaking to people about your business.

2. Know your numbers

Or at least have someone on the team who does. You can have the greatest idea in the world, but if you can’t demonstrate how the numbers work quickly and efficiently, any potential investor will lose confidence in you as a potential partner.

You don’t need to be a chartered accountant for this, but having a very good helicopter view of the overall finances yourself is vital. For anything further than that, make sure someone on the team can go into the fine details, and bring them with you to pitches. It’s a common mistake I see from entrepreneurs, not thinking they can bring expert team members with them to pitch. The more collective knowledge involved in a project, the better.

3. Know your audience/Remember for an investor, it will always be about the money

As far as any investor is concerned, all they want to know is what returns they can make on their capital if they were to invest. It really is as simple as that. Tailor all your pitches individually, but always work back from why they need to be a part of your journey, and that will always be the potential for a big return on their investment.

4. Wait as long as you possibly can before taking investment

By this, I mean explore every other avenue available to you before seeking external finance. There are two main reasons for this, firstly it shows to investors down the line that you have the drive and desire to make your business work at all costs. For that to be shown it has to be you willing to take on the risk to drive it yourself in the first instance. If you’re not confident enough to invest your own money and max out credit cards etc, don’t expect investors to put their hands in their own pockets either! Don’t be too proud to borrow from friends and family too. Anyone who can help you build your dream, without requiring equity in return is definitely the route to take.

Secondly, by waiting as long as you possibly can, you can use the first round of money that you put in yourself or borrow from your network to develop prototypes, conduct research and get the business off the ground to provide proof of concept. This will help you get a higher valuation for your business and therefore give less equity away when you finally do come to raise external funds. As much as it may be a struggle, t will be worth the wait I can assure you, as your negotiating position is much stronger when you do finally make the pitch for capital.

5. Seek out smart money where you can/Don’t be greedy with valuations

By this, I mean always weigh up what a potential investor or business partner can bring to the party, in addition to capital. For example, if your business model requires getting a product into department stores, and an interested investor is offering less than the cash valuation that you’re after – but has huge retail experience and a black book to die for in your target industry, weigh up the deal as that could be worth its weight in gold down the line if they can open doors that straight cash wouldn’t be able to.

6. Be humble and adaptable

Another one that I see people get wrong all too often. Yes, as an investor we want to see competence and confidence. However, this can all too easily be overcompensated for, and switch investors off if they don’t warm to you. People buy from people, so there’s always going to be a stronger desire to get involved and make a deal work when the people involved get on with one another – so don’t rub people up the wrong way!

Appreciate that people that you’re pitching to will be more experienced than you, might know more than you and certainly have more money than you. Be polite, create a rapport and calmly wow them with your business plan!

7. Take the free advice that’s out there.

One of the biggest benefits of the internet and in particular social media, is the huge wealth of free information that is readily available and at your disposal. Do your homework, read articles, listen to podcasts and watch videos on YouTube wherever you can. It can only make you better prepared for the journey.

My Facebook, Instagram, twitter and YouTube channels all give away free tips, advice and interviews every week on general business advice, and more specific funding areas. So, get involved and give me a follow… You never know I might be your next investor!

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