Speed is of the essence when technology is involved. How a business acquires funding can make all the difference
Technology drives economic growth: as an advisor working with a business founder, who is building technology products, it usually means that they have found and solved a problem that is hard for people to solve for themselves.
Often, new developments in science and technology create a need for new ways of working, new strategies and new solutions. Through technology, your clients are able to take advantage of these developments and outstrip competitors.
What do businesses in technology need to consider when they are raising funding?
First, the need for funding is crucial to ensure that products can be developed at a pace so that they can be relevant to their target market. The world of technology moves fast, and delays in R&D can result in obsolescence before a product has even gone to market.
Equity investment is a clear opportunity for growing technology companies: as well as providing the all-important funds, VCs will have networks of helpful individuals who will be able to advise and accelerate growth of the business. They will be able to spot and correct weaknesses in the journey from idea to market, suggest fruitful collaborations and see the bigger picture when it comes to new opportunities and novel applications.
To get the best from investment in your client’s business, you will need to have a good idea of the investors who would be right for that business: finding the right investors requires knowledge of the key players and what their particular specialisms are. If your clients have a particularly niche product, they could find that there are very few investors with the expertise you need.
For the best investment outcomes, you should also check that they qualify for investment under EIS/SEIS. These schemes are set up to reward investment through tax breaks and qualifying makes the business immediately more attractive to potential investors.
How Swoop can help: Swoop provides an equity support package where we act as an introducer and matchmaker to our large investor network of around 250+ active contacts within VC funds, angel syndicates, individual angels, and family offices. Find out more about equity funding here.
Where do grants fit into the picture?
Technology clients offer many opportunities for you to pick up grant funding with them – and for businesses in this sector, grant funding can make a big difference not just to the bottom line, but also to the viability of newly-created technologies.
While the offer of grant funding is attractive, advisors and business owners should be aware that funds often come with strings attached: you as a business may be limited in how you can use the money, it is often paid in arrears (so you may have to borrow to cover costs in advance) and you will need to ensure that your business and project are eligible under each competition.
You and your client may decide that the upsides of a successful application for the right kind of funding outweigh the downsides. Apart from having the money in their bank, a successful grant application can make your clients more attractive to investors.
How Swoop can help: the Grant Finder tool on the Swoop platform makes it easy to check which grants your clients may be eligible to apply for based on their sector and location. Learn more about grants here.
If you work with a technology founder, the approach to funding can be the difference between success and failure.
Swoop can help you and your clients at every stage of the funding journey, from acquiring start-up capital to making the business investible and connecting them with the right people to see your idea thrive in the market.