Dragon James Caan, is often an excellent source of advice; this week a small business owners has written asking for advice concerning funding – shame he didn’t mention Dream Idea!
Warren Heal, CEO of www.rentmyitems.com writes:
We are currently raising investment through Angel Investment Network and Crowdcube. I would like to ask you what other avenues of sourcing investment exist for newly launched businesses? We’ve had some great press exposure recently and are now looking for further investment to move the business forward.”
James Caan replies:
“Raising finance is one of the biggest challenges that small business owners face. There are various avenues for sourcing investment out there, but you need to stand back and evaluate your long term needs and objectives before you decide which route is most suitable for you.
The way in which you raise the money can have a big impact on your business. All sources will be looking for a detailed business plan so you should be well prepared with one of these before you start. Debt funding, if you can get it, is cheaper than giving away equity, but it comes at a cost. You will have fixed repayments which can put the business under strain in difficult times.
There are a range of angel networks across the UK where high net worth individuals provide “club investment” to young and small growing businesses. This can be an attractive route but the downside is you are unlikely to get access to the investor themselves which obviously would be a huge benefit to a fledgling business. Often the most attractive route for a new business is to have a high net worth investor who takes a strategic interest in the business. More recently this avenue is opening up now that wealthy investors are looking for better returns on their funds due to poor returns on bank deposits.
The biggest challenge of course is finding such an investor in the first place. It can be like trying to find a needle in a haystack. Search on the web for investor networks and maybe do some detailed research of non-executive directors operating in your space. It can take the time to find the right person, but the benefits can be considerable. In terms of Angel Investor Networks there are plenty that advertise on the web. Make sure you have a good plan before you send it over. A plan that is not properly considered is likely to represent a missed opportunity.”
For the full article visit the Evening Standard, Ask James Caan.
We agree that a good business plan is important, however finding a good investment network doesn’t have to be hard. The investors and experts at Dream Idea offer money as well as expertise, and our website offers plenty of tips on how to make a success of your new business. Membership is still FREE, so register today and don’t forget to check out our Mentoring Competition, “Britain’s Got 1 Million Ideas”, and you could win a mentoring package and brand new iPad2.