Discover how to attract UK investors, from private backers to venture capital firms. Learn what they look for, how to pitch effectively, and whether investment or alternative funding options can help you grow.
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If you’re looking to inject some growth into your business, a common first step is working out how to fund it. After all, whether your plan is to launch new products or expand into new markets, you’ll likely need a cash injection to make it happen. This could be via taking on a loan – debt funding – business crowdfunding or finding UK investors to put up capital, known as equity finance.
Seeking investment is a popular way of funding growth for businesses that don’t wish to take on debt, and there are a few ways to go about it. UK investors come in a variety of shapes and sizes, from private individuals to venture capital (VC) firms.
Private investors and angel investors offer direct funding, often in exchange for equity, while VCs provide larger-scale investments but with stricter conditions.
While investment can be a fast way to finance business growth, it comes with conditions, such as giving up a measure of control in your company or meeting investor expectations. It can also be challenging to attract the right investors and stand out in the highly competitive investment market. .
In this article, we’ll explore the investment options open to you, their benefits and downfalls, and where debt finance could be used as an alternative – or as a supplement – to investment.
Getting investment is a big milestone for any business. Whether you're an early-stage startup or an established company looking to scale, understanding the investment landscape in the UK can help you identify the best funding options.
The UK equity finance market used to be largely early-stage (or ‘seed-stage’) focused, as the British Business Bank pointed out in its latest Small Business Finance Markets report. But this has changed in the last ten years.
Growth-stage investment now accounts for almost half (44%) of all investment in the UK. In other words, there’s now a much wider array of choices and options available to you.
Here’s a quick overview of the key players and stages in the investment process.
Despite some economic gloom, the UK remains a great place to start and run a business.
The UK is ranked eighth in the World Bank’s ease of doing business index, and 30% of UK adults now either run their own business or plan to start a business within the next three years.
This strong business ecosystem, combined with government incentives like SEIS and EIS tax reliefs, make the UK an attractive place to invest.
Finding the right investor will mean a combination of luck and legwork. You’ll need to proactively network and do research, using resources like events, online platforms, your professional networks and investor directories.
Investors are, of course, people. So there’s an intangible aspect to investment that can’t be categorised or quantified. An investor might simply believe in your mission or might follow their gut.
However, there are some commonalities in what investors look for in general.
Getting funded requires more than just a great idea. Investors look for businesses that are well-prepared, financially sound, and capable of scaling. Here are some steps you can take to get investor-ready.
While equity funding is a popular choice for business owners, it does come with certain considerations. To understand these nuances, it’s worth comparing it to business loans as a funding option.
Equity funding will suit you if you’re looking for rapid growth, while loans are ideal if you’re seeking to maintain control over your business.
Pitching to investors requires careful preparation and a bit of strategy. Investors are looking for a strong business case, clear financials, and a confident presentation.
Here’s how to make a lasting impression and secure the best possible deal.
Securing the investment is a big step. But it’s also the first step. To make the most of any equity investment will mean managing your relationship with your investor (or investors if you’re lucky enough to have multiple).
Your business is ready for investment if you have a clear growth strategy, market validation, strong financials, and a capable leadership team. These factors demonstrate credibility and potential for returns.
No, UK investors fund a wide range of industries, including healthcare, retail, food, and sustainability.
Many investors seek innovative businesses solving real-world problems, regardless of sector. Examples include food brands, manufacturing startups, and sustainable energy ventures that have successfully secured funding.
Yes, many businesses adopt a hybrid financing approach, combining investor funding with loans to cover different needs.
Equity investment provides long-term capital, while loans can support cash flow or specific projects. Loan products like iwoca’s Flexi-Loan complement investor funding, allowing businesses to retain control over their financial strategy while accessing additional capital.
As a business owner, you’re already confident in the product or service you offer. That self-belief is vital, make no mistake, But often, good ideas fall short due to a shortage of cash at key moments.
Investment is one route to secure the capital you need. And the UK is a great place to raise funds. But in a pinch, where timelines are tight, you might need a cash injection quickly.
It’s here where iwoca can help: We’ll typically give you a funding decision in 24 hours (or less), and once approved the money is available right away. Used in combination with investment, our Flexi-Loan could help take your business to the next level.
Apply for a Flexi-Loan in minutes. With fast approval, minimal paperwork and no hidden fees, we make SME financing straightforward so you can focus on growing your business. Apply today .
