design

While these low overheads mean that no design company should feel the need for financing right away, once they are ready, public funding is often a better option than bank loans or investment. This is because design agencies are not traditionally fast growth businesses; they start off with one or two founders, utilise talented freelancers and rarely expand past a handful of full time employees within their first five years. While this lean model can generate high profit margins on relatively few clients, slow growth is the opposite of what investors are looking for.

These low overheads also mean that design agencies are very, very common. If you’re looking from a bank or investor’s perspective, it’s hard for them to decipher what’s unique between any two agencies and why one is a safer investment than another. Therefore when a design agency does seek investment, alongside explaining their worth as a creative business, they also have to differentiate themselves from a hundred other companies who are making the same claims.

Perhaps because of this, burgeoning agencies prefer to seek buyouts from larger agencies, rather than investment from banks or VCTs. This seemingly appeals to the importance designers place on creative control and credibility, while still generating capital and growth.

For these reasons, design agencies should first look to exhaust all public funding streams; where control can be maintained and high growth is not the only measure of ROI.

 

Funds and Investors for Design

Hot House

Ideas Tap Funding

Unltd Awards