Platform Funding
Congratulations! Your business is up and running in the UK, or at least ready to go. But your biggest question is what platform funding solutions do you have available to you? As an entrepreneur in the United Kingdom, you have quite a few options.
In this blog we’ll explore:
- What is platform funding
- Types of platform funding
- Platform funding vs traditional funding
- How Drop Studio can help you
What is platform funding
Platform funding is exactly that; different platforms that offer funding solutions for your business to get it to where you want it to be.
Two common and popular examples would be Crowdfunding and Angel investing. We’ve worked with a host of the world’s biggest brands. You’re looking to raise funds publicly through angel investing or crowdfunding on platform funding solutions like Crowdcube, Seedrs, Kickstarter or Indiegogo, and we’re looking to help you on this journey.
Platform funding offers fast and easy financing to small businesses like yours. Its objective is to provide financing alternatives compared to traditional banks with a focus on your business’ cash flows, rather than traditional bank underwriting guidelines.
Types of platform funding
Platform funding aims to provide your business with access to a steady stream of capital & funding in a simple, fast, and flexible way that enables you to meet your immediate goals and realize long-term strategic growth. It aims to eliminate the turmoil that comes with traditional bank finance.
The three most common platform funding solutions available to you as an entrepreneur in the UK are:
- Crowdfunding: Peer-to-peer (P2P) lending matches up smaller-scale investors with small businesses looking for funds, cutting out the middleman. You apply online, and get a loan drawn from cash pooled by savers looking for a better return on their money.
- Angel Investing: Angel investors are usually high-net-worth individuals who invest in early-stage businesses. It’s sometimes called ‘seed’ funding and you can generally expect to raise anything up to £1 million. Like venture capital, angel investors tend to invest in exchange for a share of the business, so they must believe in your business and in you. Angel investors are most likely successful entrepreneurs themselves and have a host of experience and knowledge to share with you.
- Venture Capital: A venture capitalist is an investor who funds small startups with very high growth potential. Almost every notable startup success story involves a VC, you could be next. A venture capital fund is a type of private equity fund that is funded by private and institutional investors like investment banks, insurance companies, and pension funds. Venture capital investors in the UK contribute investment to tiny or start-up businesses with high development potential.
Platform funding allows you to scale and enable growth. Startups spend their funding on growth, marketing, and most likely staff and team expansion. Platform funding is essentially injecting funds into a business with a purpose. Usually to resume or start operations.
Platform funding vs traditional funding
The main difference between platform funding and traditional funding or business finance is that traditional finance requires you to go through the bank or private financial institutions / organizations that are willing to assist you. This could be in the form of a business loan.
Typically when you apply for a loan, the bank will ask you for supporting documents such as a business plan, cashflow analysis and profit and loss forecast, and is likely to want to meet you in person before deciding whether or not to grant you the loan.
In theory, anyone with a viable business and a clear plan on how to repay the money can borrow from banks. But in reality? Not so much.
Banks take a host of factors into account before granting loans.
Platform funding differs in that companies like Drop Studio take your needs into account among various other factors in order to determine how best to assist you. Underwriting guidelines are focused on your business’ cash ledger history; therefore, the financing approval is not dependent on personal credit history.
How Drop Studio can help you
As mentioned in our other blogs, trying to secure that much needed funding for your business to scale is no easy task. It may be an emotionally taxing experience.
That’s where Drop Studio comes in.
We can help. We are proud partners of Crowdcube and Indiegogo. We assist ambitious businesses like yours in communicating their ideas, with outstanding crowdfunding video production, campaign design, crowdfunding marketing, PR and more.
We support you as our clients in finding angel investors, venture capital investors and to run successful Crowdfunding campaigns. To date, we have helped raise over £50 Million for our clients. You could be next.