There are a variety of ways to fund your company, but raising a venture capital fund (VC) is one of the most effective strategies to speed up growth and gain industry insight. Raising finance, on the other hand, can be difficult and time-consuming, taking up to six months to secure and even longer to get notification of a refusal. The last thing you want to do is neglect your business in order to devote all of your time and attention to obtaining venture capital, only to hear “no” and watch your company fail.
Seed capital and venture capital funding are two types of private equity investments. When seeking seed finance, though, you’re asking for a far smaller sum of money than when seeking venture capital—tens to hundreds of thousands of pounds vs. millions, respectively. While seed funding falls within the venture capital umbrella, think of it as the first of many steps toward obtaining funding in exchange for equity.
It’s preferable to have a succession of plans that vary depending on how much you raise rather than a single strategy. Begin with a small startup funding that will drastically alter your company’s risk profile. This could be a yearly income figure or a new product version. Then make contingency plans in case you don’t raise the required amount or raise more than you anticipated.
You might ask your network of relatives and friends whether they’re interested in helping you finance your firm before seeking venture capital. Friends and family members often put between £10,000 and £150,000 of their own money into your company without acquiring any stock. While this pre-seed activity is less formal than other fundraising methods, you should nonetheless keep meticulous records of each investment to stay organized and retain clarity.
When you have a brilliant idea but don’t yet have an established business strategy, incubators can help. Incubators will provide guidance, knowledge, and a supportive atmosphere for your startup as it grows to market. Accelerators are used when your business idea has been established but you still need assistance getting to market efficiently and fast. Accelerators generally provide startup funding in exchange for equity, but incubators rarely do.
One of the best places where you can get assisted in the startup funding process is Kansaltancy Ventures. Kansaltancy Ventures is a global investment management organization that specializes in preparing companies for funding and raising cash for them by using its ecosystem, which includes a network of over 650 global investors, including well-known Angel Investors and Venture Capital firms. The firm also specializes in strategic investments and alliances, mergers and acquisitions, and debt financing, and its clientele includes successful startups and mid-sized businesses.