Public funders are more willing to take on higher risk ventures, so long as they can demonstrate value to the community and the economy. We had success in securing a number of grants and loans that helped us develop and they are a good source of initial finance for start-ups, as they provide soft funding that does not need to be secured and has zero or very little interest.
Securing external investment, for example through an Business Angels, can be a lengthy and detailed process. We were lucky to secure seed funding and build a good relationship with our investor, but this route is not right for everyone. Bringing an external element into your business can be difficult to manage, and as you’re tied to this person long term you need someone you can work with. Ideally someone with a genuine interest and understanding of your sector, of what you are trying to do and who can add value with their experience rather than just be a source of funding.
If you are considering the route of external investment, it is vital to focus on your business plan. Investors are less interested in your product or industry kudos than they are in figures and long term growth strategies.
Like many other companies, early on we adopted the policy of Bootstrapping along with the small seed funding we had. Essentially this just means keeping your overheads low while not taking on external funding, undertaking work-for-hire as needed, to build the core of your company. It’s a very achievable way of developing your business at the beginning, as long as you see it as a temporary measure and keep track of what you want to achieve in the long run.