Day 3 at Newcastle Startup Week was our funding and finance day which took place in the beautiful Barclays office. Both speakers and delegates alike benefited from sunny Quayside views whilst sharing investment and funding advice. We have highlighted our top ten tips of the day below.
#1 Save time by automating your processes early on – NatWest Entrepreneurial Spark
Starting out can take up a lot of time. As a Founder, you are required to perform a variety of tasks, ranging from pushing out media content to managing your financial accounts. Melissa Beckett (Entrepreneur Acceleration Manager at E-Spark Newcastle), advised the audience to explore systems early on that can help automate processes and save you time. Examples of tools are Trello for project management and Hootsuite for social media management.
#2 Place matters – Barclays Eagle Labs
Where you start your business will impact how you will grow it. Andrew Lawrence (Head of SME Banking at Barclays) reminded us of the importance of free coworking spaces, such as Tuspark Newcastle Barclays Eagle Labs on Grainger Street in Newcastle. These spaces can help facilitate networking opportunities and establish connections with investors and funders – accelerating your growth opportunities.
#3 Put plans in place to reduce risk of late payments – Paid.co.uk
Securing clients isn’t the only challenge you will face. The FSB has indicated that late payments are one of the biggest pains within SMEs. Tom Howsam, Founder of Paid, therefore emphasised the importance of being on top of invoice dates and putting systems in place to chase payments in a timely manner. His platform, Paid, specialises in automating these actions to reduce stress associated with chasing company finance departments.
#3 Know which funds are available to you – The North East Fund
It can be difficult to find the right investment options for your business. If you are looking for funding there’s some good news: there are different live funds within the region! James Holloway, External Engagement Officer at the North East Fund, highlighted a variety of funds that are currently available. From small business loans to over £1m in debt finance, the region has it all. For a full range of the funds, visit the North East Fund website and get in touch with investment managers to learn more.
#4 What’s in it for them? – Notify Technology
Investment is a two way relation. Subsequently, Duncan Davies (CEO, Notify Technology) advised entrepreneurs to consider the value they provide to other stakeholders. Are you likely to provide a return on investment? Will your business give investors a strategic advantage? To get the most out of your pitch, understand the value you provide to other stakeholders and how much that means to them.
#5 Be prepared to negotiate – Sintons Law
Prior to taking investment, be aware of how much equity you are willing to give away. Sintons Law advises founders to manage a share caps table which outlines how much of the equity pie you want to keep for yourself and how much you can give away. Make sure to consider your future growth strategy and any further equity investments you may have to take going forward. One of the most common investment mistakes is when founders give away too much equity at the start, making it more difficult to attract further investment in the future.
#6 Do your research – Funding Circle
Make sure there is a genuine demand for your business. Know your competitors, do your research, and present it with confidence. In turn, Funding Circle advised, investors will feel more confident about you and your idea.
#7 Know who you’re pitching to – Bid and Research
Tim Ward (MD at Bid and Research) advised the audience on bidding for tenders. To create the perfect pitch or bid; make sure it is specifically targeted at your funders. You will understand their criteria, interests and needs. You will know what makes them tick. Don’t use the same standard pitch for everyone; look at what potential investors are interested in and tailor it accordingly, without deviating from your core business model.
#8 Look for a ‘no, because’ – Campus Capital
Investment pitches aren’t just about ‘getting money’. They are also an opportunity to get valuable feedback on your business ideas from experienced investors. Michael Howe from Campus Capital advises entrepreneurs to not take no for an answer but instead, seek out ‘no, because..’
#9 Understand the different sources of funding – Capital Pilot
Understand what different sources of funding are out there and how these apply to your business, advises Capital Pilot. Does your model lend itself to VCs, traditional loans or angel investment? Would you prefer loans or equity? Don’t feel pressured to opt in for the first type of funding you come across.Be aware of the different routes to funding and decide what is appropriate for you.
#10 Make sure you and your investor match – QVentures
Seeking is investment is like dating. You’re in it for the long-term, so make sure you and your investment manager are a match, advises QVentures. Cash injection is nice, probably even needed, but once the money is gone (and it will burn through quickly), you are left with the investment manager. Make sure that’s a positive. Investment Managers can add tremendous value to your business. They can introduce you to valuable networks and connect you to investees who have gone through similar journeys. So do your research, make sure your investor is genuinely passionate about what you do, and don’t be afraid to ask questions.
And that’s a wrap for Day 3! Did you pick up any other tips or pieces of advice? Share them on Twitter or in a comment below!