Setting up your own small business is incredibly exciting. However, we know that a great percentage of startups tend to fail, with as few as 10 percent of them surviving. There are numerous factors that can transform your startup idea into a thriving business that has been your dream since forever.
Thus, not only do you need a brilliantly unique idea but also investors to kickstart your business venture. Also, you need a solid business plan and marketing strategy. One of the most important things you need is the knowledge of finding the best investment providers UK and raising capital.
Whether you are considering the private investment market or crowdfunding, picking the right startup investors is important. It can directly influence the success of your business. Here we will walk you through some of the most effective ways of finding investors for your business startup.
Consider The Best Investment Providers UK
We have two main categories of private business investors ? angel investors and venture capitalists. These investors receive shares in your business in return for the investments they make.
- Angel Investors by The Best Investment Providers UK
Angel investors refer to people with a high net worth. These individuals have the background, resources, and money to make a business successful. If you have an angel investor, it is likely that your company will not need any other investor.
They provide enough contribution to kickstart your business venture. That being said, companies have to offer a high return on the investments of angel investors. Also, your business must be solid as angel investors don?t invest in any random business.
Moreover, these investors usually step in when the business is just starting, and they offer their own capital. Apple and Amazon are examples of businesses that started their journey with angel investors. Furthermore, an angel investor would like to have a voice and take part in the development of the company.
- Best Investment Providers UK Provide Venture Capitalists
You need venture capitalists if your business is expanding and is switching to some other chancier venture. Venture capitalists, in contrast to angel investors, don?t invest their own capital. Instead, they use the money of investors (by setting a fund where others can buy shares in the business).
While venture capitalists can assist a new business, they usually step in when the company has already been established. That company now wants to go in a certain direction and needs investment for that purpose.
Also, the amount of equity investment from a venture capitalist is usually way higher than that of an angel investor. It could be in millions. Similar to angel investors, venture capitalists have shares in the business they invest in and have a say in how they run it.
Crowdfunding As a Funding Option
Crowdfunding platforms enable a business or an individual to get funds only online via a website that provides specialized funding. It is one of the newer forms of funding a new business. It is like taking investments, loans, contributions, or pre-order from multiple individuals at the same time.
It is important to understand how crowdfunding works. An entrepreneur places an in-depth description of their business on a crowdfunding platform. The description will include all the business details like goals, plans for generating revenue, and the amount of funding you need.
The visitors can then go over this information and see if they like the idea or not. Individuals giving the money will then make online pledges to make a donation or pre-buying the service or product. The greatest advantage of crowdfunding is that it fosters interest and assists in marketing the product with financing.
Also, it is a benefit if you don?t know if there will be enough demand for your product or service. Thus, this process can eliminate professional brokers and investors by handing over the funding to common people. Furthermore, it might allure a venture capitalist over time if the business is running a successful campaign.
Funding From Business Incubators and Accelerators
Businesses in the initial stages that show enough potential can apply to accelerators or incubators to receive multiple advantages. In many cases, if your business gets an invite to take part in any such program, you can expect mentorship, a state-of-the-art setting, and industry links.
Also, you can find these incubators in any major city, helping hundreds of business startups each year. Although both terms are interchangeable, there are some basic differences in place. Incubators serve as a parent to a child who provides nurturing to the business with training.
Accelerators do a similar job, but an incubator helps a business to walk, whereas an accelerator assists the business to take a huge leap. Furthermore, these programs usually have a running period of 4-8 months and need proper time commitment from companies. Also, it provides an opportunity to make solid connections with investors and mentors.
Bootstrapping Your Startup Business
Bootstrapping or self-funding is a highly effective way of financing your business startup. Fresh entrepreneurs usually find it challenging to get funding without first displaying some traction. Also, you can reach out to your friends or family for contributions or use whatever savings you might have. It is an easy option considering that there are no compliances and formalities.
Furthermore, a family member or friend is likely to provide optimal flexibility when it comes to the interest rate. You should definitely consider bootstrapping as your initial funding option as it has many benefits.
Having your own money in the beginning, allows you to start the process without much stress or hassle. Furthermore, investors consider this as a plus point at a later stage for your business. However, certain businesses require money from the beginning. For these businesses, self-funding might not be the best option.
Conclusion
When looking for the right kind of investment, consider what stage of business you are at. Meeting the right individuals opens the doorways to countless opportunities. If you are trying to figure out how to find the right funding for your business, make sure you network with individuals in your industry. Try to foster connections that might be of benefit in the future.
