Investment Networks in the UK:
How to use investment networks to raise capital for your startup
The UK has a large network of entrepreneurial support and communities. One of the most important networks are investment networks and as a startup in the UK, it’s beneficial to make use of the investment networks available to you. This will assist you in securing more funds and increasing your chances of receiving additional funding. We’ll look at investment network options and tips for entrepreneurs in the United Kingdom and how they can help you raise capital for your company.
In this blog, we will discuss:
- What is an investment network?
- Which investment network in the UK is best for your startup and how to apply?
- How to write an investment proposal
- What should an investment proposal include?
What is an investment network ?
When starting a new business, you will need to follow the process of getting investment for your company. There are many different types of investment networks in the UK that a company can approach and they differ based on the amount of money they are willing to invest, the time they are willing to invest, and the sector they are willing to invest in.
The three most common investment networks are seed investors, angel investors, and venture capitalists. These investors will assess whether a business has the potential to generate a profit and are willing to put money into it in exchange for a share of ownership. With that in mind, it’s worth noting that many networks in the UK are looking to invest in the £500k-£1 million brackets, with this value fluctuating depending on the start-up. Because this is such a wide spectrum, you must ensure that you choose a suitable network for your startup. These investments can help with working capital, marketing, property, R&D, and various growth requirements.
Which investment network in the UK is best for your startup and how to apply?
To determine which investment network is the best for your startup, you’ll need to look at their investment sectors to see which one is suitable for your industry. Angel investors are more inclined to invest in startups. They select businesses that they are interested in and believe will be profitable in the future, even if the company has not yet established itself. Angel investors, as a result, assume greater risks, whereas venture capitalists invest in both early-stage and mature companies.
Seedrs, Crowdcube and Indiegogo are some of the well-known networks among the many options. You must first apply to become a member of an investment network. Filling out formal forms and submitting pitch decks to a network of investors are all part of the funding application process. The better your proposition, the more inclined investors will be to get on board. Have a look at our blog about creating a winning pitch deck for crowdfunding.
How to write an investment proposal for an investment network in the UK
A strong investment proposal will increase your chances of getting the money you need, and if you’ve never done it before, you’ll undoubtedly have a lot of questions. What is the best way to write a successful investment proposal? How long should it be and how short should it be? What should you write about, exactly?
An investment proposal, in simple terms, is a text document, PDF, or slide show presentation describing your business (product or service) that is used to raise funds. It appeals to people with money who might be willing to contribute financially. A great investment proposal makes compelling arguments for why your business is worth investing in, which necessitates planning before you begin writing.
- Research your market and competition
Pre-development, or discovery, is important to a startup’s success. This is when you acquire data from a market analysis and apply it to determine the product-market fit. This can eliminate various risks associated with unforeseen expenses, a lack of market demand, and other potential concerns This should involve a thorough analysis of the market size, competition, and the customer journey.
- Review your product
The ideal moment to start creating an investment proposal is when you have your MVP — minimum viable product — or an early version of your product that has enough functionality to make it viable for users.
Presenting your MVP will indicate that you have a thorough understanding of your target audience and that you can meet their needs. You should also have set out your business objectives and buyer personas at this point.
- Gather information about your investors
The final piece of the puzzle is to collect information on potential investors.
You should decide which types of investors you want to approach. They can be divided into several groups. Banks, individual investors, crowdfunding platforms, and venture capital companies are potential sources of funding for your startup. Angel investors can be highly beneficial to your business as they typically have a wealth of business expertise and can mentor or teach you. You can also join accelerator programs that can assist you in developing your idea and help you get the required funding.
What Should an Investment Proposal Include?
The layout of your proposal is mostly determined by the type of investor you choose, however, there are some aspects that must be included in every approach.
- Investment title
- Executive summary of your business, which should include your value proposition and ROI you expect to yield from the required investment right away.
- Project details
- Planned marketing and sales methods. This should include the pricing model you’ve chosen for your product and a reason as to why it’s the most profitable one.
- Project financing. This part should specify the sources of funding, forecasts, timeframes, ROI, and the investment exit plan.
We hope you enjoyed our blog about investment networks and how they can help your startup. It’s important to remember that investing in networks is just one of the ways to begin building your business. We took some time to highlight this process so you can see how it can help your company early on. Thank you for reading, we would love to hear from you!