8 ways to fund your business

Angel funding: welcome to its rise

Business angels are investing more than £800m annually into UK companies. It seems that there’s never been a better time to be an angel: After decades of playing what was regarded as a supporting role in the entrepreneurial economy, they are now moving to front-stage. The costs of starting a company (notably digital ones) has dropped like a stone, thanks to cloud computing and the ability to use the web and web-based enterprises such as Amazon as a global distribution channel. So it’s easier for individual investors to back a new business. But what are they backing? That’s a discussion we’ll be having at Real Business Funding with Jenny Tooth, CEO of the UK Business Angels Association.

Venture capital and private equity: don’t be afraid of it

Many associate venture capital and private equity funding with giving away control over their business, but that’s not necessarily so. A lack of information makes the implications and consequesnces of working with this type of funding seem blurred. In reality, the rewards could be significant – given that your business is the right type for venture capital pr private equity, and you find the kind of investor that’s a good fit.

Crowdfunding: the next big thing?

Crowdfunding raises mainly one thing: a lot of debate. You only need to look at the discussion around this new funding model’s relationship with the FSA to know that it’s new and disruptive (the finance world doesn’t like “disruptive”, does it?). 

When we asked you about the future of crowdfunding last September, the question sparked a great discussion among Real Business readers – but, in the end, most of you agreed. 51 per cent of you voted that crowdfunding will become a valuable source of finance for SMEs within the next five years.

For business, however, the questions to ask are these: who is able to borrow? What are the costs? What are the advantages? And who is lending?

Invoice finance: is it for you?

Invoice finance is a model met with scepticism. Myths around it say that it makes it difficult to exit, that it ruins customer relationships, and that it’s generally complex or confusing. Wrong, wrong, wrong, is certainly what lenders would say to those objections. 

Invoice finance has, in fact, with the help of new models, become an increasingly popular form of providing short-term cash flow for the business-to-business sector. In the current economic climate, some companies take full advantage of the repayment terms offered and it can take months for them to settle what they owe, which in turn leaves cash flow strained and suppliers left unpaid. At Real Business Funding, MarketInvoice CEO Anil Stocker will clear up some myths and help you find out whether invoice finance is for you.

Government funding schemes: are you getting your share?

Well, they have widely disappointed business leaders in 2012, but does that have to mean that government lending schemes aren’t doing their job? There is, after all a sea of them – which might be the problem.

The trust in the government’s ability to boost business finance is divided, mainly because the Coalition has churned out so many schemes over recent years that their presence is merely confusing. Vince Cable’s business bank might be the means to turn the jungle of government schemes into a nicely packaged source of help for Britain’s high-growth businesses. Until then, we’ll try to shed some light on all of them. With help of the BIS, Real Business Funding will explore what government funding schemes are on offer (and to whom?), how to really go about securing that funding, and what are the potential drawbacks.

Join us for Real Business Funding, the free conference to illuminate the new, more plural funding environment for growing SMEs. Join us on March 15, 2013, at the British Library, and join the discussion on Twitter at #unleashingfinance.

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