Finance, sources and thoughts on reality

Finance needed or the avoidance of becoming a funding junky.

Many people talk about finance and the Innovation Map provides an outline of finance providers . Below is also a simple aide mémoire of funding sources, and sources of resource which is what money provides.

Own resources

Incubator support

friends and relatives

bank loans

Angel funding

Lottery winners, you can hope!

European funding eh Regional funds

local/regional funding

central government funding and loan guarantee schemes

Venture capital

stock market both AIM and the main stock exchange

Private equity

pension funds

charities

Large company venture funds e.g. Microsoft

large company co funding e.g. GSK

partnering for external resources e.g. swaps for equity.

All quite straightforward and in the UK finance is much more accessible than in virtually any other country other than the US. There are always a number of issues commonly expressed:-

a mid range funding gap

the non venturesome approach of Venture capital

the excessive caution of pension funds

undue focus on local opportunities e.g. London but also other centres such as Leeds, Edinburgh

But, and it is a large but, although finance is often seen as a major issue in early stage funding the main need is a strong business plan and focused application of resources; then there is likely to be a substantial chance of support. Importantly there needs to be a focus on creating a business with real prospects of generating money. I've come across too many companies whose business model seems to be where is the next grant coming from or the market will come to me because I believe in my idea or invention.

Which bring me back to my 15 years of insolvency experience where you can see the common failures of lack of attention to detail and control of money flow are just that, common.

The world doesn't work like that and the critical aspect is always where is the market, who will pay for it and how do you persuade customers that they want your stuff. There are lots of selling tricks, and as a former bed salesman I know several, but the key line is the customer must want to buy.

So before you look for finance find your business and as a side line the major role of entrepreneurial training must start and end with those basic messages.