Identifying new ways to fund your business can be tough. With so many options on the table what is best for busy entrepreneurs and how do they navigate through the sea of choices that appear on the horizon?
BrewDog for example is launching their next round of their Equity for Punks campaign: in the first round they raised a record £5m in the first three weeks.
Of course, this wasn’t BrewDog’s first stab at crowdfunding and it was only made possible because they have spent considerable time building their brand and reputation and targeting their consumers, who were already engaged and behind the company, and turning them into shareholders who have an even greater interest.
There have been mixed reviews to BrewDog’s approach and even criticism over the lack of clarity on how the company will reach the revenue targets required to give investors a return, however the success of their campaign is undeniable and illustrates an alternative method of funding .
At the recent Venturefest Innovation Summit, Scottish delegates were joined by financial experts and crowdfunding specialists including SoLoCo and Lending Crowd who emphasised that, no matter how big the business, in order to start a successful campaign entrepreneurs need to develop a comprehensive funding strategy.
Spending time researching and understanding all the available options and then planning a unique and creative campaign that would allow specific goals or targets to be achieved is paramount to success.
Their top tips included:
- Affordability and credibility – show that your business is a good and low risk investment
- Be knowledgeable and understand your business inside and out
- Clarify your vision and communicate it – highlight what you can realistically achieve
- If you’re pitching to potential investors, know your pitch and test it on anyone and everyone
Crowdfunding, Angel Investment and Venture Capital aren’t the only options and may not be viable for all businesses. There are still lots of grants and loans that offer businesses which wish to work with academic expertise a chance to test the water on a smaller scale.
SFC’s Innovation Voucher Scheme is one such option and gives businesses a unique, low risk opportunity to work with universities and research institutions to create, test and develop a wide range of new products, services and processes.
For more information on the Innovation Voucher Scheme, or to find out about other funding opportunities that can help support businesses working with universities and research institutions, contact Interface: its team is based across Scotland and is on hand to help find the best way of growing a business through innovation.