Advice for Companies Raising Capital

Once you’ve decided that funding is right for your business it is time to start thinking about what the Business Angels and Venture Capital Funds will be looking for from you.

A poorly prepared business, no matter how good the underlying idea, people and product are, is unlikely to secure funding.  To make sure you stay well out of this category you’ll need to be sure your business meets the rightly, stringent demands the potential funders will place on it.

Here, we try and explain what a “fundable business” means so you can start getting ready and prepared.

What Business Angels and Venture Capital Funds look for

While not exhustive, the following list should give you a very good idea of the types of things potential funders will be looking for in your business.

  • Management that demonstrates through its business plan an in-depth understanding of its market and its competitors and has realistic financial forecasts
  • A company in which the owners have visibly demonstrated their commitment by investing much of their own money and considerable time
  • Products and/or services:
  • with competitive advantages
  • that are clearly differentiated from their competitors
  • that are sold into markets that are growing
  • A company run by strong management with:
  • experience of the relevant industry sector
  • a record of successfully handling a growing business
  • a willingness to sell a stake in the business at a negotiated valuation when seeking investment from venture capital funds and/or ‘business angels’
  • Significant barriers to competition, and a business model that can be expanded quickly and effectively
  • Know-how that is valuable and defensible
  • Businesses seeking £25,000 to £1.5m that are based in the West Midlands Region or have persuasive evidence of an intention to locate there

In practice very few companies meet all of those criteria, but the more you can satisfy the greater the likelihood of attracting investment.

Some other questions you should consider include:

  •  Is this type of finance right for your business?
  • How much will it cost?

Please make time to visit our Frequently Asked Questions articles for answers to these and many other questions.

What if your business is not yet ready for finance?

If your business is not yet ready to be presented to potential sources of funding, you should contact UWSP’s Access to Finance programme for help with Investment Readiness. This will help you get your business and your Business Plan into the best possible shape before approaching potential sources of capital.

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