As featured in Startacus, Jeff Kelisky, Seedrs CEO, highlights a few alternative financial resources that can aid your success.
Covid-19 has proved itself to be an economic nightmare as well as a health pandemic, with many small businesses and scaleups fighting to survive. While the initial economic shock may be teetering out, we can expect the recovery to be long and slow with many unknowns still ahead.
In the last few months we have seen impressive progress made from the Treasury in support of small business, with the distribution of CBILS and Future Fund monies starting to filter through to those startups and scaleups who need it. These are clear signals of the Government’s support for the UK’s large and vibrant startup ecosystem. While these efforts cover the needs of many, there are still businesses that aren’t served by these efforts or may feel these channels are not relevant or sufficient enough options for their business.
For those businesses who still have a gap to fill, there are possible alternative financial resources.
Resources available vary business to business, however, there are some common tactics that can make seeking out and pitching for funding a little bit easier to bear. Here’s some tips that can aid your success:
Tip 1: Find strength and support in your network
As a business owner, you exist within two universes:
1) a personal network formed from friends, family & connections
2) the company’s network made up of customers, partners, investors and more.
Within both of these universes there will be organisations and individuals who will want to support you and your organisation through this difficult time. If this pandemic has shown us anything it is that communities come together strongly in times of crisis.
Leaning on your network and having open discussions about the future of the business may unearth those with a willingness to lend support.
Tip 2: Angels can be your saviour
It is estimated that angels and other individual investors invest three times more than VCs per year and usually invest up to £500k with a long-term view on returns. In today’s economy, I believe they will play an increasingly important role in plugging any funding gap.
There remains calls to expand the EIS and SEIS schemes that give high-net worth individuals an increased opportunity to invest, benefitting small businesses. But the good news is that self-certified high-net worth or sophisticated investors can act as lead investors under the Future Fund to provide match government funding. This is an incredibly important development, especially for those companies that are too early for VC funding and those from outside London.
Tip 3: VC’s may shutter but the crowd offers an alternative private investor
While many venture capital businesses are focusing on their portfolio and some are pressing pause on new investments, crowdfunding has proven itself, so far, to be resilient to much of the macroeconomic uncertainty of the last few months.
After a slight dip when the initial lockdown occurred, investment levels on platforms like ours have returned to normal levels. And for our last online pitching event, we had a record 700 people register to scout out potential businesses to invest in. It demonstrates that game changing ideas and innovative businesses will always appeal to investors. And now, more than ever, investors are willing to take a chance on businesses that are poised to do great things.
Tip 4: Keep an eye on the traditional and social media for new investment channels
Social media, corporate blogs and outlets, like Startacus, are here to support you and share advice. They will signpost to new funds, programmes and business support channels that are cropping up as the startup community rallies to support small businesses. So keep an eye on what your favourite outlets and social channels are chatting about as it may throw up new opportunities that may have gone unnoticed otherwise.
The final word…
For some, securing investment will be a major part of the journey to riding out this pandemic as it gives runway to figure things out. However don’t forget that investors will be looking for a business to not just survive but also thrive in a post-COVID world. With this in mind, however you choose to access funds, you must show you are smart enough to lead the business through this change and adapt accordingly.”