The technology industry in the UK as of 2022 was worth $1 trillion and counting, making it the third country in the world to achieve this valuation. This also makes it one of the fastest-growing sectors around.
As the technology industry is so lucrative at the moment, startups are springing up all over the country. Getting funding for your startup is an important step for both initial setups and growing an established company. Obtaining venture capital is key, so here are some steps to consider when you are looking for funding.
Crafting a compelling pitch
Before you can present your pitch, you will need to do some research into who you are going to be pitching to. This way, you will be able to tailor your presentation in a way that might be more appealing to your potential investors.
When it comes to actually talking, try to speak calmly and concisely. You don’t want to lose your listeners by going off on a tangent or leave them feeling confused about your business.
You will inevitably get asked some tough questions at the end of the pitch, so try and prepare for those as best as you can. Spend time learning your figures inside out to be as clear as possible.
Valuation strategies
A common mistake that entrepreneurs make is when it comes to valuing your business. Asking for too much money will put investors off, and not asking for enough will make it hard to achieve your vision for the business.
You will need to take into account all of the assets of the business. This can be tangible assets such as equipment, stock on hand and even computers or office equipment. Intangible assets should be taken into account as well. This can include reputation, growth potential and intellectual property.
It is best to get legal help when it comes to valuing your business. Professionals will be able to give you a realistic viewpoint that can sometimes be hard to achieve alone.
Navigating due diligence and legal matters
Due diligence is the process which investors use to scrutinise a business before they invest. From their point of view, they need to be sure that the business is all above board and worth putting their money into.
To prepare for this, be sure to have all your financials squared away and easily accessible for whoever asks. It is important to remember that this process can take a long time and require you to jump through a lot of hoops.
Negotiating terms
Negotiations can be hard going as both parties want what is best for themselves. Going into a negotiation is a lot easier if you have a clear list of things you will not compromise on and things you are prepared to consider. This can help foster communication from both parties. It is OK for you to walk away from an unproductive negotiation. You may feel that discussions need to take a break for a couple of days, or you may feel that the potential investors are not a good match for you and your company.
