It’s never too early to consider fundraising.
Although many VCs won’t invest until your business has developed commercially viable technology, a strong network will help you access support at all stages.
First, look to accelerator programmes. These programmes mentor start-ups and condense the kind of growth that’s typically achieved in a couple of years into a few short months.
The real benefits of an accelerator derive from access to networks of legal and financial experts who help you develop a solid infrastructure for your start-up to scale.
Armed with knowledge and support, you can enter the investment landscape with a better idea of what you need and when you’ll need it.
Council Local Enterprise Partnerships (LEPs) can also provide support to early-stage businesses before VC funding.
LEPs can allocate funds from local growth funds, but also provide early-stage start-ups with fully-funded support.
They support early-stage businesses with developing their business plan, marketing strategy, corporate social responsibility, and management/operational structure, as well as providing financial and legal advisory.
Innovate UK’s support is similar, but it’s a national agency which focuses on developing a business’ commercial operations without a local focus. Both provide access to a robust network of experts.
Once your technology has passed proof of concept and your business generates revenue, begin researching which investors have sector expertise in your area and align with your values to secure VC investment.
I work for Mercia Asset Management, which has a legacy of success investing in technology, and our investors have sector-specific knowledge in areas including SaaS, clean tech, hard tech and deep tech.
We’re a good fit for early-stage technology businesses seeking investment because of our breadth of expertise.
Businesses should match with investors that have sector knowledge in their area and can introduce them to the right personalities to support accelerated growth.
In this age of talent shortages, attracting the right experts to serve on your business’ board can be a challenge.
Many investment houses, like ours, have a portfolio resourcing team to attract talent to the boards of early-stage start-ups.
When you know which investor to approach, develop a targeted pitch deck. One that appeals to the values and growth-strategy of your investor is likelier to help you secure the funds that you need to scale.
Even if your early-stage investor can only take you up to Series B, they should have good relationships with national and international houses who provide scale-up capital beyond Seed, as Mercia does.
Receiving the right investment to support you to achieve your business’ aspirations is dependent on connecting with the right networks, at the right time.
Before you consider VC investment, draw on support from LEPs, accelerators, and programmes like Innovate UK, who will help you turn a concept into a business plan, with financial and legal contacts available to you.
Then, your VC investor will further connect you with more experts and, ultimately, other houses to provide scale-up capital.
Finally, you yourself can build a network of other business leaders within your sector. It takes more than a village to construct great businesses, but surrounding yourself with individuals with knowledge and expertise will help you grow.
- Mercia Asset Management is one of the sponsors of Leeds City Region Tech Climbers 2022. Other sponsors include Hill Dickinson; Avison Young, BDO and Nexus in association with West Yorkshire Combined Authority; Leeds Digital Festival 2022; Tech Nation; and ZUT. The lists will be revealed on April 5, 2022 and published on BusinessCloud’s website.