Seed funding London
London is the ideal place to achieve your entrepreneurial goals, thanks to its long history of innovation. Finding the correct seed funding source, on the other hand, can be tricky. Even if you identify the right individual to pitch to, you may have to wait a long time for your seed funding request to be seen. This blog will look at several ways to get seed funding in London.
In this blog, we will explore
- What is seed funding
- Why is seed funding important
- Different ways to get seed funding in London
- How we can help you with your seed funding in London
What is seed funding
The first round of funding for a new business venture is known as seed funding. An investor provides capital in exchange for convertible debt or shares in the business. Investors make the initial investment, which the business owners then grow into a thriving business. In exchange, the founders must provide the investor with some type of return value, such as a percentage interest in the company or a cut of the profits.
Why is seed funding important
The simple answer is that many entrepreneurs cannot get to the point where their product is ready for sale without a significant amount of funding. Costs such as product development, employee salaries, and infrastructure fees can quickly pile up, resulting in hundreds of thousands of pounds spent before you even have something to sell.
Seed funding allows entrepreneurs to invest in early business costs such as marketing, public relations, important personnel and creating a successful sales staff.
Different ways to get seed funding in London
Friends and family
Calling on the generosity of family and friends is one of the most reliable ways to raise seed funding in London, but you should always be mindful of the risks involved in accepting investment from loved ones.
Your friends will be your strongest supporters, and many will be prepared to put their money where their mouth is to help you launch your new firm, but never take money from people who can’t afford to lose it or who don’t understand the risks involved.
The government’s Start-Up Loan scheme
The Start-Up Loan scheme, which was launched in 2012 to stimulate entrepreneurship, is a government-backed personal seed funding loan of between £500 and £25,000 available to anyone intending to start or expand a small business.
The interest rate is set at 6% per year, and the loan can be paid back over a period of one to five years.
Peer-to-peer financing for small businesses
Large banks are notoriously risk-averse when it comes to seed funding. As a result, they are hesitant to lend beginning capital to companies that have yet to prove their value.
Other lenders, on the other hand, are focused on assisting young businesses in need of seed funding in London, trying to expand. Peer-to-peer funding connects a small army of investors with emerging businesses in need of capital: Startups that meet the criteria can apply for unsecured business loans of up to £500,000.
There are a few startup-business grants available in London for new companies focusing on innovation in a variety of disciplines, from technology to the arts.
These grants provide financial support to entrepreneurs developing game-changing ideas with commercial potential. There are other competitions that grant seed funding to entrepreneurs with game-changing concepts on a regular basis.
With a variety of platforms offering various investment formats, this is one of the most popular ways to get seed funding in London. Startups can use crowdfunding not only to raise money and gain traction at the same time but also to measure interest in a product and develop it as the company grows. There are two methods for crowdfunding.
Crowdfunding platforms like Crowdcube and Seedrs allow you to generate funds by either providing equity in your business or being a rewards-based raise. This is ideal for startups with a non-product-based business model or for small businesses looking to expand. Because these platforms can provide investors equity in your business, they are inclined to invest more.
Angel investors are wealthy individuals who invest in early-stage businesses through seed funding in London. Many angel investors have gone on to start their own businesses. While you may always approach an investor one-on-one, pitching your business to an angel-investment network is usually a superior idea.
A venture capitalist is a person who invests in tiny businesses with strong development potential. VCs are involved in almost every major startup success story, although this type of finance is uncommon than most, and is usually only available to organizations that are rapidly expanding or have already received seed funding from angel investors.
How we can help you with your seed funding in London
Drop Studio is here to get you the most out of your seed funding campaign. Through our investor research, we will help you find and connect with investors who currently own shares in high-growth UK businesses within your sector. You’ll also receive guidance on how to approach these investors to give you the best chance at securing funds.
You will receive ongoing support from a campaign manager as well as access to our online course. Through our project management software, you can ask specific questions and get valuable feedback. In addition, our online course will help you map out a solid fundraising strategy and teach you how to reach out to investors for your seed funding in London.
Having a professional pitch deck is essential for delivering a convincing pitch to investors. With Drop Studio’s support, you can be confident that this key part of your seed funding campaign will not only include all the crucial elements of your business plan but will also have an attention-grabbing design that is on-brand.
Our experts will guide you towards understanding how valuable your company is through a step by step valuation process. We look at your business from different perspectives thereby resulting in a comprehensive view.
We hope you enjoyed our blog about seed funding in London. If you would like to give seed funding in London a try, you can visit our website at Drop Studio. We would love to hear from you!