If you’re starting a business or setting up as a sole trader, you’ll need money to cover the cost of establishing and progressing your plans.
Raising appropriate funding for each stage of your journey can be complicated or challenging, but it can also be crucial to your success long-term and something you need to navigate correctly from the outset.
Here are START UP's top 3 tips for knowing when to seek funding...
1. Know your funding stage
Do you have a great concept, a well-developed business opportunity or are you in the early stages of your business? If you’re at ‘concept stage’, you’ve got some exploration work to do before you’re ready to involve finance.
Once you’ve put the hours in to validate your ideas and prove your concept is viable e.g., through market research or prototyping, you’re at ‘pre-seed’ stage and likely to be eligible for grant funding, loans and accelerator programmes to help you launch your start-up.
Once you’ve launched, you’re at ‘early-stage’ or ‘seed stage', which is when you can look to crowd funding, angel investors or seed venture capitalists to help you grow into your later stages.
2. Be clear on what your funding is for
Great, viable ideas paired with commitment will get you to a conversation about funding but once you’re there, you must be completely clear about your financial needs. To be considered for funding, you should come to any conversations or applications knowing exactly how much you require and exactly how you will use it to reach the next milestone in the growth of your venture.
3. Get the right funding at the right time
Timing is often more powerful than great ideas. According to Innovate UK, the right funding at the right time accounts for 42% of the difference between a start-up succeeding or failing. Asking for funding too early could mean you get a lesser deal or no money at all, whilst waiting too late could mean your business struggles to get off the ground or grow. Getting your timing right will support each stage of your business growth correctly and help it become a long-term success.
Do you have a pre-seed or early stage business opportunity?
START UP is awarding equity-free funding in grants of £500 or £3,000 to advance eligible pre-seed and early-stage business opportunities with a clear and genuine need for the funds. Applications are open 18 January - 14 February 2021. Further eligibility criteria and T&C’s apply.