The UK, especially London, is a global technology hub, and it is no secret that tech startups are taking the investment industry by storm making it essential for other businesses to adapt to this modern culture.
The speakers at our Tuesday ‘Funding for Science, Tech and Innovation’ event discussed a wide range of funding types, from grants to venture capital.
THE PANEL COMPRISED OF:
• Umerah Akram from growth and investment program and platform Elite UK & International, LSEG;
• Alex Chalkley from grants application firm Granted Consultancy;
• Edward Keelan from upscale venture capital firm Octopus Investments;
• John McKeown from tax relief provider RIFT;
• Katy Levitt from business angel and crowdfunding platform SyndicateRoom;
• Adrian Allen from equity and debt funds provider Newable; and
• Karen Holden from a startup friendly legal enterprise A City Law firm.
Akram explained that the key components of securing investment are, company’ readiness for growth against key pillars, structured training, them having a deeper understanding of different types of finance and networking with advisers, investors, peers and business leaders.
Chalkley stated that the three lessons to remember for Grant funding is to make sure your business is eligible, you provide strong documents and you strike a balance between your application and supporting documents.
Keelan explained that drivers to a successful investment are a strong business model, scalability, ability to differentiate and a strong management team.
McKeown, listed different types of state aid funding options out there such as government grants, investor funding and research and development tax relief.
Levitt shared that, ‘there is money, and especially in London’. From where we were 10-15 years ago, the industry has really shifted, and not just by chance but because the ecosystem has really come together.
Allen mentioned that in addition to UK and EU grants, there are other various mechanisms for financing science, technology and innovation in early stage ventures. These include loans, grant combined with investment competitions, collaborative research, corporate venturing, independent funding bodies, crowdfunding, debt finance, cashback such as government’s R&D Tax Credit incentive, customers and private investors or business angels.
Holden explained the importance of carrying out pre-due diligence audit in order to identify all the issues before hand and fill in the gaps. She urged the businesses to ‘look in the mirror’ and consider the investor’s perspective when looking at your business. Finally she asked crucial questions that you may want to consider. How much equity can you afford to give away? How long can you commit to the business and is your current/next investor a long-term investor?
ALL SPEAKERS AGREED THAT:
• In today’s day and age most companies are ‘tech companies’, no matter if companies are tech-centered or tech enabled. Keelan stated, ‘If they’re not tech companies, they’re dead’.
• Remember that the investors will always have your initial deck so if you promise then you need to deliver!
• AI, machine learning, blockchain and cryptocurrency technologies have the potential to truly take away centralisation and really change the way people operate. Also Allen predicted that there might be some big advances in the med-tech and agriculture-tech sector in the future.
• The increased London VC funding and investment trend of the past few years is going to continue. Keelan explained that part of this increase is due to crowdfunding especially for early stage companies.
• Despite Brexit, foreign investors are still interested in the UK economy. Last year UK received 8.6 billion in investment, of which half accounted for foreign investment. Why? Quality still drives investment, rather than the politics.
COMMON MISTAKES OF APPLYING FOR FUNDING:
Many panelists pointed out that although tech entrepreneurs are very good at developing their products, their weaknesses are often in the foresight, and understanding the commercial aspects of their products.
As mentioned McKeown, despite bringing the next advanced solutions in R&D, often businesses are unaware of their tax benefits, i.e. R&D tax credits. Entrepreneurs need to be able to think one, two, three years ahead, consider tax incentives for investors such as EIS and SEIS as well as their own eligibility for tax reliefs and government grants, and understand where they’re going next.
Allen also spoke of approaching the right funders – technology is very broad, and you’ll have funders within different patches of tech that specialise. You need to be strategic, do your homework for who you approach, and make sure they absolutely understand your sector.
Never underestimate your competition! As Keelan pointed out, sometimes companies will assume that what they’ve got is completely unique – that is seldom the case. You need to really understand your competition and recognise what makes you different. How are you going to adapt your products to the market and manage your competition going forward?
OVERVIEW OF FACTORS TO CONSIDER:
- Get your company structure right.
- Get your legal structure right.
- Ensure that your technology is novel and disruptive.
- Make sure your product or service is commercially viable, scalable and exportable.
- Come up with appropriate business strategy.
- Hire right people to deploy this strategy.
- Be efficient and effective while managing cash flow and other financials.
- Be determined – you can’t give up after first rejection.
- Demonstrate progress and traction on subsequent applications.
- Be flexible and adaptable – learn to pivot and change your business model as necessary.
Missed this event? Wish to flaunt your business in front of a room full of investors? Then join us for our next event at WeWork Paddington, ‘Showcase your Business to Investors’ on 26th May at 17.45. Maximise your brand exposure in front of prominent industry experts. Secure your ticket here!
Looking for something more? Checkout the list of our upcoming events here!