As the UK economy emerges from the worst of the COVID-19 pandemic, the thoughts of business owners are increasingly turning towards the future – rather than merely focusing on short-term survival.
However, startups and small businesses across the UK – the kinds of companies that would, ordinarily, be the motor of an economic recovery – are facing a simple problem that is seriously impacting their growth prospects: a funding shortfall.
A lack of government and private funding has led to mounting concerns that small businesses with high-growth potential may not have access to the working capital necessary to achieve their aims. This issue has proven to be particularly pronounced in emerging areas such as FinTech.
For small companies and startups looking to secure funding to help them attain growth after COVID, they may have to take the initiative and try alternative channels to help lock in the financing they require. Here are three possible sources of funding that small business owners might consider.
Crowdfunding
Crowdfunding is probably more associated with charity fundraising than it is with business investment. However, that is beginning to change as budding entrepreneurs and owners aiming to take their micro businesses to the next level realise the possibilities it offers.
Furthermore, fundraising for business ideas on crowdfunding sites doesn’t just have to rely on the kindness of friends, family and well-meaning strangers to make donations. Increasingly, banks and investors are utilising crowdfunding sites to identify potential up-and-coming businesses to invest in.
There are, in fact, a whole new generation of crowdfunding sites dedicated to connecting investors with small business owners. For business owners looking to attract investment, sites such as Seedinvest and AngelList could offer the perfect solution.
Network in-person and online
One of the main things that has been lacking for small business owners over the past two years is the ability to get out there and meet potential investors face-to-face. In-person networking has been vital for business owners looking to secure funding since time immemorial and many will have felt its absence sorely during the COVID-19 pandemic.
However, now that lockdowns and other similar restrictions are seemingly a thing of the past in the UK, startup owners can start heading to events in order to network with potential investors. Furthermore, with investors also among those emerging from the stasis of COVID-19, many will be actively looking for new companies to deploy capital into, boosting your chances of success.
Of course, the pandemic also forced many small business owners to turn to online networking channels in order to try and access financing during times of social distancing and lockdown. Resources like LinkedIn are still a valuable method of finding investors even in the wake of pandemic restrictions, while the ubiquity of conferencing applications like Zoom means that owners can now speak “face-to-face” with a wider, more geographically dispersed pool of potential investors than ever.
Startup accelerators
With an accelerator program, you can liaise with other startup-owning peers, gain valuable insights on running a small business and learn useful tools to help with financing, for example, how to formally launch a fundraising round.
In some cases, such programs will even involve putting startup owners in direct communication with parties looking to invest in small businesses. Again, as with networking at events, this is a face-to-face opportunity that startup owners and investors alike will be keen to seize post-COVID-19.
Funding is a challenging issue for startup owners at the moment, but the end of COVID-19 restrictions means that there are a whole host of new opportunities opening up for owners willing to take the initiative, go out there and try to impress potential investors. Furthermore, growing digitalisation, new tech platforms and apps mean that there are more arenas than ever in which owners can find, communicate with and secure investors.
