Finding an investor for a small business in London is challenging for any business owner looking to start or grow their business.
If your business is at the pre-profit, pre-revenue stage, developing the prototype requires a lot of initial capital.
The UK offers various funding channels and investors for small businesses, from private investors to government funding.
With the right approach, you can take a considerable approach to secure investment for your small business. Investors are the largest source of funding for startups and early-stage businesses in the UK.
This guide explores how to find investors for your small business in London, the options available to you, and how they can benefit your business.
So let’s discuss more in the article.
How to find investors for a small business in London
Investment is like a lifeline for small businesses in London to grow from just an idea to a growing business.
Getting the right investors can offer the capital, expertise, and connections you need to grow your business. Follow the steps below to find investors for your small business:
1. Get a clear idea about the feeding that you need and your goals
Get a clear idea of exactly how much capital you need and what you will use it for. Break down the budget you need into line items like operational costs and marketing costs, and map out the timeline for deployment.
This helps you to show your professionalism to investors who want to see what you think about every pound.
Choose the correct investor for your business, as the different investors have different check sizes and expectations.
2. Prepare a financial model and compelling pitch
The strong pitch of your business and the best financial model are essential to showcase to investors who are ready to invest in your business. Which includes:
- The problem-solving methods like what are the pain points and what solutions you are offering for that.
- How large a market is available for your business model?
- How will you make money from this business?
- How does the customer get attracted to your business, how to generate revenue, pilot results, and who are your partners?
- Need to introduce your team as key founders and advisors.
- How will you exactly use the funds that investors are investing in your business?
- Introduce potential buyer profiles for higher-growth ventures.
- Your financial model must include the expenses, revenues, and cash flows for at least 3 years.
- Also, include the best-case and worst-case scenarios.
- Make your financial model real and avoid optimistic projections.
3. Analyse angel investors’ networks for your business
Angel investors are the most popular high-net-worth individuals who invest in early-stage businesses. Some most active Angel investors in London are:
The
- UK Business Angels Association, UKBAA, is a national trade association listing a wide number of members’ networks across the UK.
- London Business Angels, LBA, is one of the oldest and biggest networks who are typically invests a range of £50K up to £200K per deal.
- Angel CoFunds is a co-investment fund that joins angels to support UK startups.
You can approach Angel Networks:
- Deliver warm introductions supported with contact on LinkedIn or mutual contacts.
- These networks usually host the pitch nights and demo days, so attend these events.
- Showcase your early revenues and pilot customers to stand out.
4. Approach venture capital firms for high-growth startups
Venture capital can fit your business of your business’s demonstrated strong reactions as well as has strong potential for rapid scaling.
London is a leading hub for Venture Capital in the UK, having firms like Balderton Capital, Index Ventures, Octopus Ventures, and Local Globe.
Venture capital supports businesses with a proven product that perfectly fits for market, has strong growth metrics, and with some revenue.
5. Look for Crowdfunding platforms
Crowdfunding offers even a small amount of funding from large groups of investors to your small business. The crowdfunding platform of the UK includes-
Seedrs offers the equity crowdfunding dashboard, nominee structure, as well as due diligence.
Crowdcube is a similar model to Seedrs, offering a track record of funding for customer brands, tech startups, as well as food and beverage startups.
Crowdfunding helps to build a community by marketing to brand advocates. The campaign needed the proper preparation, including your production video, press outreach, as well as clear rewards or equity terms.
6. Opt for government grants and loans
The government of the Uk offers a wide range of loans, grants, and support schemes for small businesses, including:
- British Business Bank offers startup loans up to £25,000, invested by the government.
- Innovate UK is a grant for small businesses, es as research and development projects.
- Local Enterprise Partnerships is a regional committee that runs the grants and funds for small businesses.
7. Join accelerator programmes
Join Accelerators programs in the UK, which offer funding, office space, mentorship, as well as introduction of your business in exchange for equity.
The Accelerator programs in London include Seed Camp, Entrepreneur First, Techstars London, and Founders Factory.
Accelerator programs can increase your credibility and networks.
8. Join networking events and meetups
London often hosts an exclusive calendar of startups and investor events, which includes,
- London Tech Week
- FinTech Health Conference
- Silicon Roundabout Meetups
- Investors-hosted pitch evening and demo days
You can get investors for your business by attending these events regularly, by joining relevant meetups, and by making follow-ups on business cards and LinkedIn connections.
9. Make use of social media and online platforms
- LinkedIn will help you to search for Angel investors and some Venture capital firms with a personalized connection request.
- AngelList helps to create a startup profile and apply to direct investors as well as syndicated investors.
- Twitter will help you find many Angel and Venture capital by sharing insights.
Conclusion
Finding the right investor for your small business in the UK includes preparation, targeted outreach, as well as relationship building.
You can start by specifying your funding needs and crafting a complete pitch for investors.
You can complement all these funding options with active networking, online engagement, and a solid due diligence process as well. Each step of securing investment refines your business proposition and expands your network.
So be prepared with your solid pitch and get the correct investor for your small business.
