{"id":6110,"date":"2020-06-25T08:56:58","date_gmt":"2020-06-25T08:56:58","guid":{"rendered":"https:\/\/swoopfunding.com\/au\/?post_type=blog&#038;p=6110"},"modified":"2024-03-27T11:56:34","modified_gmt":"2024-03-27T11:56:34","slug":"start-me-up-how-to-find-investment-for-your-startup","status":"publish","type":"blog","link":"https:\/\/swoopfunding.com\/au\/blog\/start-me-up-how-to-find-investment-for-your-startup\/","title":{"rendered":"Start me up: how to find investment for your startup"},"content":{"rendered":"\n<p><strong>By Neil Dillon, Equity Manager, Swoop&nbsp;<\/strong><\/p>\n\n\n\n<p>There are many ways to peel a kiwi and even more ways to <a href=\"https:\/\/swoopfunding.com\/au\/startups\/\">fund a startup<\/a>, but knowing which type of funding best suits your needs can be difficult. Perhaps you\u2019ve got an idea but you need the money to make it a reality. Or maybe you\u2019re running a new business that&#8217;s in a position to grow. Either way, you&#8217;re likely to be making some crucial decisions that will no doubt determine whether your business succeeds \u2013 or not \u2013 especially if you&#8217;re dealing with the negative effects of the coronavirus pandemic.\u00a0<\/p>\n\n\n\n<p>Perhaps, like many entrepreneurs, you\u2019ve used your own savings to launch a business. In any case, you might now need to decide whether you&#8217;ll use your own money or someone else\u2019s to drive your business forward. I want to help shed some light on some of the options available to you. I&#8217;m focussing here on five stages of&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/knowledge-hub\/equity-finance\/\">equity finance<\/a>: bootstrapping, family and friends,&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/knowledge-hub\/business-angels\/\">angel investment<\/a>&nbsp;, crowdfunding and&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/knowledge-hub\/venture-capital\/\">venture capital<\/a>. It&#8217;s important to note that some businesses might pass through all these stages in succession, while others might skip some stages \u2013 or may need only one type of funding to make their business work. If you&#8217;re looking at equity finance you&#8217;ll probably have decided against<a href=\"https:\/\/swoopfunding.com\/au\/knowledge-hub\/debt-financing\/\">&nbsp;debt finance<\/a>, which I&#8217;m not covering here.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Bootstrapping<\/strong><\/h3>\n\n\n\n<p>Many entrepreneurs choose to go it alone. If you&#8217;re in this camp, you&#8217;re probably highly resourceful and you haven\u2019t been blinded by the bright lights of venture capital (VC). You might still seek VC funding at a later date but for now you&#8217;re happy to build your business using your own savings or early profits.&nbsp;<\/p>\n\n\n\n<p>While this may not be the most glamorous route, it can feel very rewarding. There are many reasons you might decide to bootstrap your business, e.g.<\/p>\n\n\n\n<ul>\n<li>to maintain control of the business&nbsp;<\/li>\n\n\n\n<li>to wholly own the business<\/li>\n\n\n\n<li>because you can&#8217;t attract investors (e.g. if your business has a slow growth trajectory).<\/li>\n<\/ul>\n\n\n\n<p>When you bootstrap, be prepared to:<\/p>\n\n\n\n<ul>\n<li>work from home or use co-working spaces&nbsp;<\/li>\n\n\n\n<li>watch those expenses<\/li>\n\n\n\n<li>do your own publicity&nbsp;<\/li>\n\n\n\n<li>oh, and watch those expenses!<\/li>\n<\/ul>\n\n\n\n<p>Your growth curve will likely be much slower than if you had secured investment but, if you succeed, your struggles and challenges will all be worth it when you own 100% of the business and the profits are all yours.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Family and friends round<\/strong><\/h3>\n\n\n\n<p>Many founders will be lucky enough to have a strong network of family and friends on hand to lend moral support and advice \u2013 and if you&#8217;re really lucky, to put money into your business. This sort of raise is usually between \u00a310,000 and \u00a3150,000.<\/p>\n\n\n\n<p>Here are some top tips to avoid any tears:&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Keep it professional and use proper documentation&nbsp;<\/strong><\/li>\n<\/ul>\n\n\n\n<p>No matter how close you are with your investors, money can complicate things. Be business-like when you pitch to family and friends. Tell them about your business model and let them be convinced by the merits of the business, rather than your personal need. If you remove emotion from the transaction there&#8217;s less likely to be resentment later. Documentation is a must, both for obvious legal reasons and to demonstrate to your investor(s) that this is a real commitment \u2013 it&#8217;s an exchange of money for equity in your company.&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Detail the risk involved&nbsp;<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Your friends will want to help, but don\u2019t let them get carried away with all the potential upside. Remind them that most startups fail \u2013 or at least don\u2019t grow as much as initially hoped. Make them aware of the risks of their investment.<\/p>\n\n\n\n<ul>\n<li><strong>Don\u2019t dilute too much&nbsp;<\/strong><\/li>\n<\/ul>\n\n\n\n<p>It might seem like a good idea to give a good chunk of equity to your loved ones, but don\u2019t dilute the ownership too much or it will prove very difficult to raise money via VCs or angels in later rounds. Like any win-win negotiation or transaction, both sides should feel they&#8217;ve got a good deal.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Angel round&nbsp;<\/strong><\/h3>\n\n\n\n<p><a href=\"https:\/\/swoopfunding.com\/au\/knowledge-hub\/business-angels\/\">Business angels <\/a>are usually high net worth individuals who have experience investing in early-stage businesses and may be entrepreneurs themselves. Angels are more motivated by a return on investment (compared to family and friends) but are usually knowledgeable about a specific industry and can provide valuable guidance \u2013 and contacts. Cheque sizes range from \u00a310,000 to \u00a3250,000 but are typically \u00a320,000 to \u00a350,000.&nbsp;<\/p>\n\n\n\n<p>Getting an audience with angels is notoriously difficult unless you have a lot of rich friends\u2026 If you don&#8217;t, spin your Rolodex to find out if any of your long distant cousins are investing moguls! Or start with some well-connected friends who move in the right circles. Like it or not, it\u2019s who you know\u2026<\/p>\n\n\n\n<p>Think about getting in front of angel networks (syndicates). These are usually made up of ten or more angels and they write cheques between \u00a3100,000 to \u00a3500,000. It can be difficult to get an introduction to these networks, not least because they see a lot of deal flow. It helps to have a sparkling&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/blog\/pitch-perfect-tips\/\">pitch deck<\/a>&nbsp;so that when an angel lays eyes on it he\/she can quickly understand your business and the potential, and feel greater confidence in the business proposition. In other words, be investor ready.&nbsp;<\/p>\n\n\n\n<p>Swoop&nbsp;comes in handy at the angel stage (and at all stages for that matter). Our team can review your pitch deck and help you improve it. Once you\u2019re investor ready we can get your pitch deck in front of the right angels (and VCs). When it comes to angels it\u2019s a numbers game, but you need to find the right type of investor for your business \u2013 the right match. If you&nbsp;<font color=\"#007fac\"><span style=\"caret-color: rgb(0, 127, 172);\"><u><a href=\"https:\/\/app.swoopfunding.com.au\/stage\" data-type=\"URL\" data-id=\"https:\/\/app.swoopfunding.com.au\/stage\">register<\/a><\/u><\/span><\/font> with us, our technology can match you with current investors who are most likely to have an interest in your business. Our team of well-connected advisors take it from there.<\/p>\n\n\n\n<p>Make sure you make it easy for investors to take advantage of any tax breaks. In the UK, the vast majority of angels will invest under the&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/knowledge-hub\/seed-enterprise-investment-scheme-seis\/\">Seed Enterprise Investment Scheme<\/a>&nbsp;(SEIS) and&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/knowledge-hub\/the-enterprise-investment-scheme-eis\/\">Enterprise Investment Scheme&nbsp;<\/a>(EIS). You should apply to HMRC for advanced assurance before you make any approaches to angels or VCs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Crowdfunding<\/strong><\/h3>\n\n\n\n<p>Popularised in the US, crowdfunding is a great way to get traction and publicity in the market while also raising funds for your business. Read more about crowdfunding in our&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/knowledge-hub\/the-enterprise-investment-scheme-eis\/\">Knowledge Hub<\/a><a>.<\/a>&nbsp;Crowdfunding is big business and there are a number of players that can help you find investors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Venture capital (VC) round&nbsp;<\/strong><\/h3>\n\n\n\n<p>Some entrepreneurs see venture capital as the \u2018holy grail\u2019 of funding. For others, it signals the end of their control of the business. However you see it, there&#8217;s no denying that venture capital provides funding, guidance and a whole host of other benefits that can rocket your business from product-market fit to profitable growth!&nbsp;<\/p>\n\n\n\n<p>There are many VC firms out there and it can be difficult to find out their investment strategy. Some entrepreneurs have the right connections, but if you don&#8217;t, you can spend a lot of time trying to meet VCs \u2013 this is time away from focusing on creating a viable business. As with angels, crowdfunding and indeed all equity finance,&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/equity\/\">Swoop<\/a> can help you find an alternative to going it alone. We can introduce you to the right potential VCs for your business.<\/p>\n\n\n\n<p>Here are some top tips before you reach out to VCs:&nbsp;<\/p>\n\n\n\n<ul>\n<li>Prepare a&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/blog\/pitch-perfect-tips\/\">pitch<\/a> (see angels section above).<\/li>\n\n\n\n<li>Understand your finances and be able to justify your&nbsp;<strong>unit economics<\/strong> and financial projections.&nbsp;<\/li>\n\n\n\n<li>Make sure you have&nbsp;<strong>product-market fit <\/strong>(i.e. your&nbsp;product&nbsp;satisfies a strong&nbsp;market&nbsp;demand.)<\/li>\n\n\n\n<li>Get EIS\/SEIS&nbsp;<strong>advanced assurance<\/strong> (i.e. provisional indication from HMRC that you&#8217;ll be able to apply for tax relief for your VC investors).<\/li>\n\n\n\n<li>Get to know the VCs and choose wisely \u2013 when you accept an offer of investment you&#8217;re not&nbsp;looking just for money but rather a partnership that will shape your business for several years.<\/li>\n<\/ul>\n\n\n\n<p>There we have it, the many ways to get your startup funded if you&#8217;ve decided that&nbsp;<a href=\"https:\/\/medium.com\/swoopfunding\/pitch-perfect-tips-58c03089625b\" target=\"_blank\" rel=\"noopener\">equity finance<\/a>&nbsp;suits your needs more than&nbsp;<a href=\"https:\/\/swoopfunding.com\/au\/knowledge-hub\/debt-financing\/\">debt finance<\/a>. None of these options is particularly accessible but you knew it wasn\u2019t going to be easy!&nbsp;<\/p>\n\n\n\n<p>To quote Tom Hanks (as Jimmy Duggan) in the 1992 movie A League of Their Own,&nbsp;&#8220;It&#8217;s supposed to be hard. If it were easy, everyone would do it&#8221;.<\/p>\n\n\n\n<p><strong>If you&#8217;d like to Swoop to help you access equity funding, <a href=\"https:\/\/app.swoopfunding.com.au\/stage\" data-type=\"URL\" data-id=\"https:\/\/app.swoopfunding.com.au\/stage\">register<\/a> with us online or call us on 0203 514 3044.<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-css-opacity\"\/>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Neil Dillon, Equity Manager, Swoop&nbsp; There are many ways to peel a kiwi and even more ways to fund a startup, but knowing which type of funding best suits your needs can be difficult. Perhaps you\u2019ve got an idea but you need the money to make it a reality. Or maybe you\u2019re running a [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":6498,"comment_status":"closed","ping_status":"closed","template":"","category":[1368,1361],"acf":[],"featured_image_urls":{"full":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"thumbnail":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-150x150.png",150,150,true],"medium":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-300x158.png",300,158,true],"medium_large":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-768x403.png",768,403,true],"large":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"1536x1536":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"2048x2048":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"image_blog":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-408x252.png",408,252,true],"image_podcast":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-397x298.png",397,298,true],"image_banking":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-38x20.png",38,20,true],"image_blog_internal":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"image_blog_medium":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"image_single_banking":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-80x42.png",80,42,true]},"post_excerpt_stackable":"<p>By Neil Dillon, Equity Manager, Swoop&nbsp; There are many ways to peel a kiwi and even more ways to fund a startup, but knowing which type of funding best suits your needs can be difficult. Perhaps you\u2019ve got an idea but you need the money to make it a reality. Or maybe you\u2019re running a new business that&#8217;s in a position to grow. Either way, you&#8217;re likely to be making some crucial decisions that will no doubt determine whether your business succeeds \u2013 or not \u2013 especially if you&#8217;re dealing with the negative effects of the coronavirus pandemic.\u00a0 Perhaps, like&hellip;<\/p>\n","category_list":"<a href=\"https:\/\/swoopfunding.com\/au\/category\/blog\/\" rel=\"category tag\">Blog<\/a>, <a href=\"https:\/\/swoopfunding.com\/au\/category\/equity\/\" rel=\"category tag\">Equity<\/a>","author_info":{"name":"fabiocalheirosuk","url":"https:\/\/swoopfunding.com\/au\/author\/fabiocalheirosuk\/"},"comments_num":"0 comments","featured_image_urls_v2":{"full":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"thumbnail":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-150x150.png",150,150,true],"medium":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-300x158.png",300,158,true],"medium_large":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-768x403.png",768,403,true],"large":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"1536x1536":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"2048x2048":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"image_blog":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-408x252.png",408,252,true],"image_podcast":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-397x298.png",397,298,true],"image_banking":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-38x20.png",38,20,true],"image_blog_internal":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"image_blog_medium":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash.png",840,441,false],"image_single_banking":["https:\/\/swoopfunding.com\/au\/wp-content\/uploads\/sites\/4\/2020\/06\/ali-yahya-ytNFYf4d_30-unsplash-80x42.png",80,42,true]},"post_excerpt_stackable_v2":"<p>By Neil Dillon, Equity Manager, Swoop&nbsp; There are many ways to peel a kiwi and even more ways to fund a startup, but knowing which type of funding best suits your needs can be difficult. Perhaps you\u2019ve got an idea but you need the money to make it a reality. Or maybe you\u2019re running a new business that&#8217;s in a position to grow. Either way, you&#8217;re likely to be making some crucial decisions that will no doubt determine whether your business succeeds \u2013 or not \u2013 especially if you&#8217;re dealing with the negative effects of the coronavirus pandemic.\u00a0 Perhaps, like&hellip;<\/p>\n","category_list_v2":"<a href=\"https:\/\/swoopfunding.com\/au\/category\/blog\/\" rel=\"category tag\">Blog<\/a>, <a href=\"https:\/\/swoopfunding.com\/au\/category\/equity\/\" rel=\"category tag\">Equity<\/a>","author_info_v2":{"name":"fabiocalheirosuk","url":"https:\/\/swoopfunding.com\/au\/author\/fabiocalheirosuk\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/blog\/6110"}],"collection":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/blog"}],"about":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/types\/blog"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/comments?post=6110"}],"version-history":[{"count":1,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/blog\/6110\/revisions"}],"predecessor-version":[{"id":33608,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/blog\/6110\/revisions\/33608"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/media\/6498"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/media?parent=6110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/category?post=6110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}