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...
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.
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.
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.