Start-up funding

Everyone needs funds to get their business off the ground - but where do you get them? Start-up funding can take many forms, including grants, loans, venture capital and investment from a business angel.

Grants

A grant is an award of financial assistance, including cooperative agreements often given by the government or other organisations to eligible applicants. If you need a grant to get your business started, do some research and apply. You could also enter a competition to win some serious cash. Below are some key sources for young entrepreneurs.

You may be surprised just how many grants are available. Our list is not comprehensive but is a useful starting point.

Loans

All entrepreneurs have to deal with banks. They can provide funds in the form of loans and overdrafts if they like your business plan. When you meet with the bank, there are a few things that you can do to make a great impression:

• Be on time and look tidy. Turning up late won’t give a good impression and they may not take you seriously if you look untidy.
• Take a spare copy of your business plan. This should be complete, neat and clearly marked with your contact details and ready for you to hand over.
• Take any products, posters, website details or items that help explain your idea and market niche.
• Remember to smile. Even if they turn you down now, you need them on your side.

Investment funding

Investment funding can take the form of either venture capital or a business angel.

Venture capital

Venture capital investments generally are high risk investments but offer the potential for above average returns. A ‘venture capitalist’ is a person who makes such investments. A ‘venture capital fund’ is a pooled investment vehicle (often a partnership) that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans.

Business angel

A business angel, or simply an angel, is an affluent individual who provides capital for a business start-up, usually in exchange for ownership equity. Unlike venture capitalists, angels typically do not manage the pooled money of others in a professionally-managed fund. However, angel investors often organise themselves into angel networks or angel groups to share research and pool their own investment capital.