Successfully Funding Thousands Of UK Limited Companies Since 1989
Require Immediate Support? Helpline 0800 056 0410
There are many stages of funding that a business can go through, and each one represents potential growth for your company. Pre-seed funding occurs at the earliest stage of a business when you take your ideas and form them into a practical commercial offering.
It’s a crucial part of the business journey, and one that can see your business dreams come to fruition. You’ll need to develop what is called a Minimum Viable Product, or MVP, so that you have something tangible to take to the market.
So how can pre-seed funding help you do this and where can you go for the early stage finance you need?
When you attract pre-seed funding the investor takes a proportion of the equity in your company – this is often between 10% and 20%. As the business is not yet at the stage where it’s making money, this funding is vital to get your business off the ground.
Pre-seed funding differs from seed funding, in that seed funding is sought at the next stage, once any necessary iterations have been carried out to your product and it’s deemed ready to take to the market.
This type of very early funding can be used to develop the Minimum Viable Product that we mentioned earlier. It’s foundational for your business and if the product is well received it can also help you gain some early traction in your market.
You could use the funding for the costs associated with creating your MVP. This might include building a team with the necessary skills to help you develop the product, for example, or perhaps developing future distribution channels.
Angel investors can be individual investors with experience in business, or a syndicate. If a syndicate is involved there will typically be a ‘lead’ person who you have contact with. Angel investors can offer valuable mentorship and practical support, as well as the funding you’re looking for.
Crowdfunding involves pitching your business idea online on a crowdfunding platform. You may be able to attract sufficient funding from multiple individuals to get the business moving.
Start-up incubators are collaborative groups that help early stage businesses to develop. They provide practical support, such as mentorship and training, finding a suitable premises or workspace, and crucially, sourcing the funding you need.
Pre-seed funding is crucial if you have a great business idea that needs to come to fruition. UK Business Finance is an independent business finance brokerage and can help you source the pre-seed funding you need. Our services are free and we have access to whole-of-market quotes. Please get in touch to arrange your free consultation.
We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.
What are the finance options for a growing or expanding business?
With such a wide range of finance options available for growing and expanding businesses, it’s difficult to know which one is the most suitable. This stage of business is crucial, however, and it’s important to make the right funding choices.
How to finance a business
Business financing and funding options have expanded greatly in recent years and you’re no longer restricted to loans from the major banks. The alternative finance market offers funding solutions that you may not have considered before, and that are typically quick to obtain.
How to get a business loan
The right type of loan can kick-start your business or provide the financial support that enables growth. Not all business loans are made equal, however, and it’s important to know your options and how to source the best deals.
What is a debenture?
A debenture is a legal document used to define the terms of a secured business loan for a limited company or limited liability partnership. It includes the full amount of the loan, the interest rate and term, and the specifics of the lender’s rights to the asset mentioned.