Unfortunately money alone cannot nurture a business. However, help is at hand in the form of business incubators or, as they are sometimes coined, innovation centres or business accelerators. These are companies set up to invest and dedicate their time, money and advice into a venture that is set to hatch into a company of the future and vary in their range of support packages and demands.
Incubators normally take your idea at an early stage and support it until it reaches the next stage of growth. Incubation packages will vary greatly. These include funding for early stage companies in areas such as accommodation, hardware, software, management, marketing, telecoms, legal and accounting services and recruitment, for example.
It is important to shop around as many incubators as possible to see what they offer. They range from university business support units, which generally help academics take their idea to the next stage, to pure venture capital led incubators and are generally backed by people with varying amounts of experience.
As well as funding they may also give you the chance to use their technology, staff and support services as well as corporate identity, for example.
Go to our incubator section for a more in-depth look at what they have to offer. Search for an incubator in our directories.
If none of the other options suit your needs, perhaps you could turn to one or more business angels. These are private investors (often former business owners or senior managers) who have a certain amount of capital in their bank accounts and who are interested in directly investing in private companies. In return for their investment, which can range from approximately £25,000 to one million pounds and can either involve a single angel or a network of angels, the party involved will generally ask for an equity stake and perhaps take a seat on the company's board. There are also tax incentives available through the "Enterprise Investment Scheme" (EIS). Details can be obtained by calling the Enterprise Investment Scheme Association (EISA) on: 01732 465828, Fax: 01732 462657. www.eisa.org.uk
And if one angel isn’t enough, you can always try to organise a group of investors. It takes more time but it can be done.
Getting together a group of business angels in a network can often be used to acquire a larger pool of funding. Angels are often entrepreneurs who have between £50,000 and one million pounds to invest. An example of this is the National Business Angels Network (NBAN) that is on hand to guide and advise you. For example, the NBAN will provide you with your own practitioner who will show you how best to present your proposal to potential nation-wide private investors. For £150, the NBAN will also:
- publish your proposal for six months in the NBAN monthly bulletin and for 12 months on the NBAN BestMatch website
- publish your proposal in the business section of The Daily Telegraph
- allow you to participate in local presentations and investment fairs
The addition of an angel to the team or someone who can impart good business advice, may be the deciding factor in the success or failure of your venture.
Read our business angel section for a more in-depth look at what they have to offer.