Funding

VCs vs Crowdfunding vs Angels OR Together?

July 19, 2018

As you know, we organise different events throughout the year, focusing largely on equity funding, and how businesses can secure it. Many times we have discussed Venture Capital, Crowdfunding, as well as Business Angels – which are of course the three most popular forms of equity funding. 

However, our upcoming Tuesday ‘VCs vs Crowdfunding vs Angels OR Together?’ event is going to be a special one, covering them all at once! It is shaping up to be quite stirring, dare we say scandalous!

The funders will be challenged to answer the following questions…

How do you 'sell' your business to VCs without selling your soul or at least with high interest?

Is Crowdfunding set to die or prosper?

How to differentiate between a true angel and a devil disguised as one?

Do VCs prefer companies that have or haven’t been previously crowdfunded?

And more!

With representatives from VC firms, Crowdfunding platforms, as well as BA networks, the goal of this event is to give you a taste of what each funding type has to offer, and what the requirements are – helping you choose the right option for you and your business.

Confirmed speakers:

Andrew Adcock, Chief Marketing Officer at Crowd for Angels, a leading UK crowdfunding platform that raises funds for companies through the issue of shares (equity) and crowd bonds (debt) to investors.

Colin Spiller, London Angel Club Manager at Angels Den, an online investment platform that connects businesses with angel investors. It was founded in April 2007 and is authorised by the Financial Conduct Authority.

Dan Hardy, Equity Fundraising Manager at Crowdcube, a leading equity crowdfunding platform for entrepreneurs of start-ups and growing businesses to connect with potential investors.

Xavier Ballester, Director of Angel Investment Network's brokerage division, a platform connecting new businesses with angel investors. AIN is the largest angel network in the world.

Magda Posluszny, Associate at Seedrs, a leading, pan-European, online platform for investing in the equity of private companies. Seedrs funded over 600 businesses such as Revolut, Landbay or Perkbox.

Manish Miglani, Investment Director at Nesta, a global innovation foundation that seeks out, sparks and shapes powerful new ideas, joining with others to take on the big challenges and shift how the world works for everyone.

Gonçalo de Vasconcelos, Co-founder and CEO at Syndicate Room, which helps early-stage UK startups and scaleups raise equity investment. Their platform provides access to a wide network of high-net-worth and sophisticated private investors as well as their own EIS Fund.

Come to our event and find out all you need to know to make an educated choice regarding your funding options!

New to equity funding? Get a quick overview:

Crowdfunding

Crowdfunding can be a way of raising finance relatively quickly, often without upfront fees. 

It can help you to generate funds for a project but can also allow a business to market test a product that may only be in planning phase, ultimately helping to promote the business or product before it has launched. 

Investors using crowdfunding will often look for:

·     evidence of a tested idea that has the potential for future growth and development

·     an idea belonging to a high growth sector (e.g. tech), or an industry that the funder has a personal interest in

·     a niche idea that has an established audience in the marketplace

Depending on the platform, crowdfunding investors may be relatively new to the game or take a more casual approach to investing. This means that you may not receive the kind of expert support you might expect from Angels or VCs. Since crowdfunding is open to the wider public, investors are also likely to hold a much smaller stake in your business.

Business Angels

Most BAs invest between £10K and £500K. 

BAs invest in start-ups or young businesses needing to fund activities such as product development or market expansion. They differ from VCs in that they are private investors rather than a company. 

Many investments offer potentially high returns but also involve high risks. A BA investment can often result in the total loss of the amount invested, while other investments may provide a 10x + return depending on the success of the business. 

BAs can make investment decisions quickly but will still need to see that you have a good business plan before they commit. Many specialise in particular industries, making them a potentially valuable source of expert knowledge and even mentoring.

VCs

Most VCs invest between £250K and £10M.

VC funding is usually the hardest out of the three to obtain. Providing both expert management support and strong connections, as well as big financial capital and possible future rounds, VC funding can lift the potential of your business dramatically.

·     VCs are very selective about who they do business with: co-operation with team and founders, and a shared vision is crucial

·     Current traction and deep market research may prove key when pitching to a VCs, as they value a business plan which is grounded in reality, rather than assumptions

·     You should be clear and realistic about your direct and indirect competition

VCs are very thoughtful and careful with their investment, as their main goal is to multiply their capital minimum by 3-5 times. Because the ROI is their first criteria, the ability of your startup to generate revenue is of the utmost importance.

Which is right for you?

The event will address some key questions to help you get a better idea of what exactly each kind of investor is looking for, and what the common elements of wildly successful fundraising campaigns are.

We will also discuss the relationships between the funding types, whether or not you can combine them, and if there are benefits to this.

Find out this and more at ‘VCs vs Crowdfunding vs Angels OR Together?’. The event will be held at WeWork Moorgate on Tuesday 24th July (18:00-20:30). For more info and tickets click here.

Do you have a question? Contact us now!

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