The following industry specialists are all speaking at the Business Funding Show; for further information visit http://businessfundingshow.com/. Up today we have Crowdcuve head of equity investment Michael Wilkinson.
What do you think is the most popular way of securing funding right now for SMEs?
The availability of capital for SMEs continues on an upward trend. There has never been a better time to start or grow a business. Companies that are a little more established and at the top end of the spectrum have tended to look towards debt via platforms such as Funding Circle offering peer-to-business finance, or Crowdcube to raise via mini-bonds.
Do you have any tips for SMEs to improve their chances of securing investment?
Funding, however you do it, is a lot of hard work. Any founder needs to realise that the three to five months they'll spend raising cash will be a full- time job. If you're not prepared for that you’ll fail. Preparation is absolutely key; understand your value proposition, preempt difficult questions, ensure that you pull together all of your personal and professional networks, write up email templates to send out to various groups, ask for introductions to influencers, go to pitching events, network like crazy. The final piece of advice is work out how much cash you need, exactly what it's for and why and then talk to various different finance providers to understand which type of finance is right for you at that point in time.
Tell me about the venture capitalism situation
I think it's changing, but not rising. They are starting to see more competition from alternative forms of financing, which means that they're having to shake things up. More than ever VCs are offering value-add solutions, such as recruitment, introductions and events. They are becoming far more hands-on to try and hold off the growth of the crowdfunders. I see the bottom-feeding VCs, the guys that trick unsuspecting entrepreneurs with hidden rights and demands in investor agreements, going out of business.