Alernative Funding

Angel Investors and Venture Capital Funds

Equity investment is a way to finance many different stages of the business journey. Whether starting out or experiencing a high-growth phase, equity is an important part of finance arrangements for businesses and usually brings broader expertise with it. It is also important to recognise that many investors can take a minority stake – not purely a majority stake.

Investors’ interests are aligned with those of the business, meaning all are on board for the growth journey.

Business Growth Fund (BGF)

The mission of the Business Growth Fund is to unlock the potential of fast-growing UK businesses that need long-term capital to drive their future success. The BGF has up to £2.5bn with which to make long-term equity investments.

FSE Investor Network

The FSE Group invests in SMEs that have the potential for significant growth, providing funds and support, including mentors where appropriate, to help bridge funding gaps. As well as SMEs looking for growth, funding and support could also be available for social enterprises wanting to fulfil their potential or community projects seeking to generate renewable energy.

Funding Circle

Through Funding Circle, businesses can borrow directly from a wide range of investors, including more than 40,000 people, the UK Government, local councils, a university and a number of financial organisations.

UK Business Angels Association (UKBAA)

The UKBAA is the national trade association representing angel and early stage investment. The UK Business Angels Association connects all those involved in the angel investment market with a view to ensuring a coherent ecosystem for financing the growth of start-up and early stage businesses.

Crowdfunding

Crowdfunding is still a relatively new phenomenon, but has captured the attention of hundreds of thousands of people looking for investment. If you are struggling to finance your business venture, advertise on crowdfunding sites and you may get investors from all over the world pitching in to help. Money invested through most crowdfunding sites does not have to be returned.

There are plenty of crowdfunding sites out there. For starters try Crowdfunder, CrowdCube and KickStarter.

Equity crowdfunding

As opposed to regular crowdfunding, if you raise funds through equity crowdfunding you will have to give something up, i.e. equity, a stake in your business.

One example of an equity crowdfunding platform is Seedrs, which allows people to invest as little as £10 into a business.