On Wednesday this week I joined a live Q&A session with the Guardian Small Business Network team to exchange some advice and insights on crowdfunding. Also on the panel were crowdfunding platform experts Darren Westlake, CEO and co-founder at Crowdcube, Alysia Wanczyk, marketing director for Seedrs and Ayan Mitra founder and CEO of CrowdBnk, as well as specialists in legal and financial services and entrepreneurs who have received crowdfunding. You can read the transcript of our discussion here.
To become a member of the Guardian small business network register for free here.
£600,000 awarded to roll-out of entrepreneur centres across six UK regions.
Abigail Van-West at Startups reports on plans to expand the British Library’s entrepreneur centre across the country which have been supported by both Barclays and the government.
Set to replicate the British Library’s Business and IP Centre, which provides entrepreneurs with free access to advice clinics, practical workshops and networking events, the centres are set to roll-out across Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield.
Following funding early in 2012 from the Intellectual Property Office, the new centres have secured additional support, with secretary of state for communities and local government Eric Pickles announcing his intention to put £600,000 towards the project over the next two years as part of the Enterprising Libraries project.
Similarly, Barclays has signed an agreement to support the webcast of the British Library’s ‘Inspiring Entrepreneurs’ events, which have previously featured entrepreneurs including Lord Sugar, across the six national libraries.
Following a pilot, which has seen 2,000 local entrepreneurs securing business support, the first official centre is set to launch in Newcastle in the Spring.
Announcing the funding Pickles commented: “This fantastic project deserves Government support. It will give communities business support and turn town and village libraries into incubators of innovation.
"By expanding the pool of entrepreneurial talent and reaching every community it will lead to the creation of more businesses, more jobs and ultimately, contribute to economic growth across the country.”
This article first appeared at Startups
12th February 2013
Bootstrapping is all about creatively using the resources that you have.
Entrepreneurs who attend my seminars are helping me to compile a list of great money-saving resources for start-ups – some are completely free and some are cost-effective for new businesses.
Below are ten of them. For another 100 click here.
And if you come across any great resources that you'd like to share with other entrepreneurs, please let me know!
Thanks, Paul | email@example.com
1. www.bl.uk/bipc British Library IP & Business Centre. A fantastic resource. Tons of free information, low-cost training and three hours of a professional researcher’s time
2. www.mymas.org Manufacturing advisory service – free advice, contacts and even grants available
3. http://99designs.co.uk post a competition with prize which you award to the best design
4. www.fiverr.com finds someone to do a special task or skilled work for about £3.50
5. www.hardtofindseminars.com free audio training for marketing your company
6. http://seedrs.com for businesses looking to raise up to £100k in seed capital
7. http://westminster.the-hub.net cool and cost-effective workspace a stone’s throw from the Institute of Directors
8. www.womenlikeus.org.uk very effective for recruiting part-time staff
9. http://sketchup.google.com for modeling an idea without using CAD
10. www.meetup.com/londonocc Open Coffee meet-up group for networking and advice
Global Entrepreneurship Week (GEW) is the world’s largest campaign to promote entrepreneurship across 115 countries. This year it takes place between 12th and 18th November.
In the UK, the campaign is hosted by Youth Business International, a global network of initiatives that helps young entrepreneurs to start their own business, in partnership with Barclays. Last year over 900 partner organisations got involved in the week in the UK, reaching 213,000 people through 2,305 activities. This year the campaign is even better.
If you’re thinking about starting a business, or are in the early stages of running one, make sure you attend an event which can help you with your entrepreneurial journey. Check out what's on in your area here.
I was at the London Business Village earlier this week, a high-quality event hosted by the team at the British Library Business & IP Centre (BIPC) as part of GEW. You can read about it here - and there's still more to come. If you haven't visited the centre before, take the opportunity as soon as you can - it's an excellent free resource for entrepreneurs where you'll find all the help you need to start or build your new business.
To keep up with the latest news and events during GEW visit:
I'll be at Founder Camp this week - a three-day event organised by Academy at the HUB and Hub Westminster, together with the London Hubs (Hub Kings Cross and Hub Islington), to celebrate entrepreneurship and what it takes to be an entrepreneur. There will be classes, workshops, panels, founder presentations, a ‘crowdfunding fayre’ and a ‘startup tools fayre’.
On the first day, Thursday 20th September, from 2pm-4.30pm I'll be delivering a workshop called Funding your Venture, then hosting a panel session on Seed funding from 4.30pm-5.30pm with some experienced, active investors - including Angel Investor Colin Coghlan, venture capitalist Justin Carter of EC1 Capital, and Springboard investor/mentor and social impact investor Tony Kypreos. Among other topics, we'll be discussing what they look for in their investments and the secrets of successful partnerships, as well as answering any questions.
With three seasoned industry insiders on the panel attendees can expect plenty of insights and information on how to get their businesses funded.
Inspiration for entrepreneurs by entrepreneurs
Then at 6.30pm, following on from some networking, there will be a session highlighting success stories from business founders who have already raised capital. This will include some invaluable tips and ideas for entrepreneurs who are keen to learn from the experiences of others who have been through the funding process.
Founder Camp promises to be a great event so do try to get along. I hope to see some of you there. For the full Founder Camp schedule click here.
Eventbrite, MOO, Enternships, PeopleperHour, Crunch, Sooqini, BookingBug, Foodity, FoundersFit, F6S, Seedrs, Buzzbnk, PeopleFund.it, Crowdcube, MarketInvoice, FundingCircle, Emerge Venture Labs, ClearlySo, UnLtd, Kingston Smith, Farrer & Co, HR Insight, The Funding Game, Data Science London, EC1 Capital, and many more aspiring and experienced founders.
Update: 1st October 2012
Maggie & Rose receives major investment
"Maggie & Rose are pleased to announce that an investment of £600k has been received, therefore reducing the amount left to raise on Crowdcube to £200k.
This has cemented our belief that Maggie & Rose can become an even greater business, delivering creative members’ clubs for families in London and beyond.
Our new investor is working with us strategically and operationally to optimize our growth:
“With the right vision and support, Maggie & Rose is going to be an incredibly successful brand in defining the global standard of a modern family club - engaging, enriching, entertaining the entire family with uncompromising quality. We look forward to being a key financial and operational partner in Maggie & Rose’s journey to create and define this untapped universal market in the UK and around the world.”
The terms of this investment are confidential."
Update: March 2013
Maggie & Rose investment put to work
Check out how Maggie & Rose is using its investment to build a brand new family members' club in Chiswick, London.
Last month I attended an event with Escape the City's founders Dom Jackman and Rob Symington, and their brilliant team, on 'How to fund a start-up'. Some of those who attended the event sent questions in afterwards and I've answered these below and on the Esc blog here. Thanks again to those who came along to what was a lively and inspiring event for everyone.
1. Get interest free loans where possible
How do companies go about raising initial family/friends funding and what type of share issuance do you usually issue for these initial investors (i.e. preferred shares, common shares, etc.)?
If it's a family and friends round it's most likely to be in very early seed stage. Put together a slide-deck backed up by a few financial forecasts (take no more than a week working on this though) and offer “ordinary” shares with no voting rights. If possible try to get interest free loans – much simpler. Whatever you agree to, make sure you get any agreements in writing and be sure to warn them of all the risks involved.
2. Prove the concept before raising capital
In addition, how do you as the owner protect yourself from dilution during all financing rounds? Do you issue new shares that are non-dilutable?
As a founder, dilution will be part of the game and unless you are able to put in cash to match the investors at each round you will have less of a percentage than when you start – but hopefully a much bigger company! Just be sure you get as much “proof of concept” as possible before raising capital, otherwise you will give away too much too soon.
3. Reduce equity split in three ways
When you are an unproven start-up that needs to raise money, how will an investor value your company and which steps should a start-up take to minimise the equity stake required to secure investment?
An investor will value your company based on your future promise and commitment. If it looks as if a 20% stake (for example) will make 10x return in five years then it's a fair valuation. In general a pre-sales start-up is unlikely to be over £500k. There are three ways to reduce equity given away – firstly, by bootstrapping; secondly, by leveraging equity cash with debt; thirdly, by ratcheting down – having options to buy back shares at a nominal value when achieving pre-set milestones.
4. Value your investor wisely
When an investor brings more than money to the table, how should this experience, advice and contacts be valued?
There is no structured way to evaluate this – typically you can add 2-5% for experience and advice. The “contacts” element could be measured though and it's an option that could be realised if certain doors were made open by the shareholder i.e. an extra 5% if an introduction to a Sainsburys buyer resulted in an order for example.
5. Patents are often a bonus
Do investors look for certain technologies or patentable ideas for their investments?
Yes. If at all possible investors prefer technologies that are patented or have a commercial advantage that is difficult to duplicate. However this is often a bonus. More importantly it is about the team, the idea, the market and the scalability.
6. Keep share structure simple
How should the share structure of the company be set up to allow investment? Should there be a certain number of shares in the company?
Just keep things open and simple – where no existing shareholders hold preference shares. When setting up a company allow for a large “authorised share capital” for flexibility and issue 100 or more allotted shares between founders before more shares are issued.
7. Don’t pay yourself over £30k
As part of any proposal made, should or how should salaries be included? That is to allow founders to go into the business on a full time basis.
Salaries are a touchy point but the profit and loss, cashflow and service agreements should show intended salaries over the next year or two. Most investors frown on anything over £30k a year. They want the entrepreneur to be focused on the big pay day at the exit point – just as the investor is.
Rob Symington and Paul Grant shared war stories around business funding
The great team at Escape the City kindly invited me to speak at the first event of their summer series last night (more announced shortly).
In the packed Rehearsal Room at Adam Street Club, Rob Symington (co-founder of Escape the City) and I spoke to a group of more than 80 people about ‘How to fund a start-up‘.
There was a great atmosphere and lots of good questions and lively discussion. The Esc team has written up an excellent summary of the event which covers everything from Angel Investing and Bootstrapping to Crowdfunding and VC Pitching, supported by plenty of personal stories and insights to learn from. If you're an entrepreneur looking for funding you'll find some invaluable advice here: Insights and Advice about Funding Start-Ups.
Thanks to Rob, Dom, Adele and the Esc team for inviting me to speak - I really enjoyed the event - and thanks to all who came along. Thanks also to Beverley Hamilton of one step further who has shared some of the things she learned at the event (below).
View photos from the evening here: http://on.fb.me/PLbsNK
Join Escape the City here: http://escapethecity.org
More on Esc: Escape the City (Esc) is a global community of 70,000+ talented professionals who want to ‘do something different’. The idea for Esc was born in London by Dom Jackman and Rob Symington who were working as management consultants in the heart of the corporate world - ‘the City'. They wanted to move on from their jobs but were struck by how hard it was to make that leap. Esc is their solution and they are now on an unstoppable mission to help talented people escape from unfulfilling corporate jobs. Read the Esc story on their blog here - Our story and keep an eye out for more Esc events over summer: http://escapeco.eventbrite.com/
I had a great opportunity to speak at Venturefest 2012 this month - a free business creation networking event held at Oxford's Saïd Business School on Tuesday, 19th June. The event is now in its fifteenth year and this year had an exciting programme of sessions which ran alongside the regular Innovation Showcase and Exhibition.
If you weren't able to get there on this occasion, the clever folks at Elephant Creative, who were taking part on some of the expert panels, also managed to live blog and tweet about the event throughout the day. You can read their brief summary of my session, Creative Ways to Fund Your Business, as well as summaries of the other presentations here: http://venturefestoxford.wordpress.com
At the heart of Venturefest is the funding stream. All day long, entrepreneurs seeking capital to start or expand their businesses are able to give 15-minute presentations to an audience of several hundred people among whom are investors, venture capital companies and high net worth individuals actively seeking to invest. It's a great opportunity for entrepreneurs and investors alike and creates a lively buzz at the event.
Thanks to everyone who made this year's Venturefest such a success. It was a pleasure to play a part in it. Here's to next year! For more details about Venturefest and related events visit: www.venturefest.com
I met an entrepreneur recently who had spent £50k on legal fees to protect his idea with patents. As a result he is broke and has no prototype, no customers and no investors willing to invest. He also doesn’t really know if his protected (not-yet existent) product is even something that anyone is ever likely to buy!
Unfortunately, this story is not unusual. In truth, only 5% of all patents manage to return the investment made in them.
I’m not suggesting for one minute that you neglect to protect your ideas. Not at all. However, I am going to suggest three things you must do BEFORE deciding to make a patent application.
1. Produce some visuals or a rough mock-up of your prototype, or create a demonstration website. At the earliest stage, there is no need to get an expensive prototype made up. Just use your imagination and make use of the existing materials you have available to produce something that helps a person understand the benefits that your product or service offers.
2. Get out and talk to potential customers about what you want to produce or offer. Ideally, many, many customers. This removes the guesswork and will help you find out a lot about the pricing, design packaging and changes to your product that will satisfy your customers. Now you know what your customer REALLY wants and you have something that you can sell.
3. Speak to independent technical advisors such as engineers, programmers, other inventors, suppliers – even Universities and the team at the British Library IP Centre, but NOT patent lawyers at this stage. Ask them how feasible it is to produce and scale your idea. Also ask them how easy it would be to copy your idea. Often, one small change in the look, size or mechanism of an invention is enough for someone to copy your idea WITHOUT infringing the patent. Many ideas that get patented at huge cost are quickly copied with just a slight adjustment to the patent application, making the original patent worthless.
When you’ve covered these steps, think again. Do you still want to go for IP (Intellectual Property) protection? Is your idea worth thousands of pounds and months or years of personal commitment – or would it just be better to get your product to market quickly and start building your business? Securing patents is not the only way to protect an idea. Sometimes a quick route to market is enough.
Finally, if you decide you really need a patent and only remember one thing from reading this post – make sure you get a FIXED FEE agreement with your lawyer. If you pay by the hour it can be one of the quickest ways to burn through £50k. Always set a limit on the amount you’re prepared to spend.
Fortunately, the entrepreneur I met is pursuing a better opportunity with a brand new idea – and you can bet he’ll be protecting it differently this time.
Trademarks? Copyright? Patents? What is intellectual property?
The British Library has produced this useful introduction:
Follow Intellectual Property Expert Steve Van Dulken's blog at The British Library:
Paul Grant is founder of The Funding Game and is running a series of workshops on the topic of raising capital for start-up. The next workshop, 'How to Bootstrap a Start-Up', will be held at the Queen Mary Innovation Centre on Thursday, 26th April 2012 from 1pm-5pm. For discounts and special offers on all Funding Game events subscribe to our mailing list.