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Start-up Finance

When seeking funding for a start-up, you must begin by putting together a good business plan. It must show potential backers or lenders that your ideas are viable and fully costed.

Start by asking yourself the following basic questions:

  • What will your start-up and ongoing costs be?
  • Do you have this money already in place or will you need to borrow it?
  • How much money must the business make each week and each month to cover your personal and business costs?
  • Are you prepared to be out of pocket while you build your business?
  • How much will you charge for your products or services?

What is cash flow?

Cash flow measures the amount of cash that comes into and goes out of your business over a specified period of time.

  • Positive cash flow means more money is coming in than going out.
  • Negative cash flow means the opposite is happening. 

In other words, cash flow affects the amount of money you have available to fund your daily operations. If you were to have negative cash flow for too long, the business would struggle because paying your bills and meeting your other financial commitments becomes too hard.

Third-party equity investors

Some business ideas may need a great deal of research and development. Software development, for example, or online services creation. This may require alternative finance or equity investment because this type of funding isn’t typically suitable for banks.

Third-party equity funders offer investment in your business in exchange for a share. The upside is there’s no immediate interest payment and plenty of expert advice and support. But you will no longer fully own the business. And if you want to regain full control, the equity you’ve given up could be costly to buy back.

Depending on where you are in the business cycle, we could explore the following funding options with you:

  • One of our many Business angels.
  • Our partner venture capital firms (VCs).
  • over 5000 Independent investors.

When financing a start-up, Angel networks and individual investors could support you with funding. They like to buy in early, but usually want more equity because of the higher risk. However, they are usually sophisticated investors with a passion for your sector and lots of useful experience.

VCs look for better-established businesses with the potential for higher, long-term growth. They offer significant funds to suitable businesses, along with mentorship and a network of contacts. But, you’ll have to give up some control, and they could intervene if they don’t like the direction of the business.