The following industry specialists are all speaking at the Business Funding Show; for further information visit http://businessfundingshow.com/. Up today we have Funding Game founder Paul Grant.
What challenges do you feel are associated with angel investment for smaller companies?
There are three main challenges: firstly, getting enough ‘proof of concept’ through sales, new customers, web visitors or any other metric that reduces the risk. These numbers need to be growing month on month. Secondly, getting a team together that has a credible background with a mix of skills and thirdly knowing how to pitch the compelling future promise of the business with clarity.
Do you have any tips for SMEs to improve their chances of securing investment?
Spend a lot of time researching each investor that you approach. If you do that it will give you a huge advantage in knowing how to position your investment proposal and make you stand out from other entrepreneurs. Offering a deal that matches what they are looking for will build quick trust. Also, work on refining your pitch down to a one-page plan or a five-minute face-to-face presentation. Investors love entrepreneurs who are able to deliver concise, interesting pitches. Lastly, start building relationships with the investment community as early as possible.
Do you feel like venture capitalism is on the rise?
Yes, it is rising at a rapid rate and it’s hard to keep a track of all the new venture capital funds. There is also a large rise in the number of smaller funds of syndicated angels taking advantage of generous UK tax schemes such as the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). It has never been easier to funding an enterprise, although it can be confusing with the sheer volume of options out there.
What do you think the SME funding model of the future is?
In the past an entrepreneur would choose between business angels, venture capital and, more recently, crowdfunding. Nowadays though, more and more deals on equity crowdfunding platforms are supported by business angels, venture capital firms and the general public. I think the future offers a more blended approach to raising capital using multiple sources of financial assistance on one round of funding rather than going down just a single avenue. This is good news for entrepreneurs.