Tips & Tools for raising in the SW

Your first raise 

Most startups have to raise small investment rounds before they’re able to get enough traction to raise the big bucks, and this is what angel investors can help you with. 

If you’ve exhausted your list of family and friends, who often make the best angels, you should check out the resources we’ve compiled below.

It’s also worth checking your eligibility for SEIS / EIS investment. This provides massive tax savings for your investors and as a result makes you a much more attractive proposition! Gov – Investment Schemes

Finding Angel Investors (£10k – £800k)

Your best bet is to start with your own network to find angel investors – who do you know that might be interested in your proposition? Who do they know? Remember that angel investors might work independently or as part of a group or syndicate.  

• You can search the directory of angel groups on the UKBAA website. You might want to consider Angel List too.
• You could research your peers and competitors via startup directories (Crunchbase, Owler, Open Corporates) to see who has funded them. You could also take a look at their board of directors. 
• You can join an incubator or accelerator – these organisations usually have their own little black book of investors and will be able to help you become ‘pitch ready’ and ‘investor ready.’

Local Groups and Syndicates:

Bristol Private Equity Club – BPEC is the only angel group in Bristol at the moment. They see c. 20 investment opportunities each year and you can message them directly to enquire whether they would be interested in your proposition. They also have access to a £10m co-investment fund for the South West via Newable. 

Michelmores Mainstream – a network for business angel investors, has been established by Michelmores, and is registered with the UK Business Angels Association (UKBAA). 

Inclusive Angels – set up by two founders who believe passionately about business, equitable access to finance, learning from others and sharing our knowledge. Inclusive Angels is a growing network of angels, investing inclusively in the South West. 

Dorset Business Angels – https://dorsetbusinessangels.co.uk/

Other active angel groups/funds locally include:

• Minerva Angels – cover multiple regions – https://minerva.uk.net/
• Surrey 100 – http://www.surrey100club.co.uk/
• Cool Ventures – https://coolventures.co.uk/
• Severn Seed Finance – https://www.severnseedfinance.com/
• Deepbridge Syndicate – https://www.deepbridgecapital.com/products/deepbridge-syndicate
• Angels invest Wales – https://developmentbank.wales/other-services/angels-invest-wales 
• Startup Funding Club – national – https://www.startupfundingclub.com/

You could also research ‘family offices’ that may be interested in your sector.

Once you’re looking for a larger amount of money, Venture Capital is often the way to go. In general VCs will look for a significant amount of equity in return for their investment, and will expect to have a say in how the company is run. Most VC’s won’t consider investing unless you are raising £500k+ It is important to assess your options carefully.

Finding Venture Capital Investors (£500k +)

There are a huge number of Venture Capital investors around the world, your challenge is to find those that fit with your raise value, your company values, your sector/proposition and your ambitions.

VCs will expect you to have met certain growth and customer milestones before they will review your pitch deck so make sure you do your homework before approaching them.

There are a number of tools that exist to help you find the best investors for you, these are some of our favourites:

• Europe wide, searchable investor database
• Euro-Tech VC funds
• Sifted’s corporate innovation directory
• A profile of 29 European tech investors from Sifted
• Covid-19 European Investor list

VC Investors with a local presence (£600k +)

We like to keep an eye on which investors have a physical base in the region, we have these organisations on our list so far. 

• Mercia Asset Management
• QantX
• Maven Capital Partners 
• Horatio Investments 
• BGF
• Deepbridge Capital 
• The Wealth Club
• Coutts Bank
• Technology Venture Partners
• Catalyst Venture Partners

Paying a fee for professional support

There are also a number of corporate financiers in the region who often have their own investor community, sometimes organised through a proprietorial crowdfunding platform. If you are prepared to pay a fee in return for investment support, this is a good option. The fee structure varies between organisations. Shaw and Co., ICON Corporate Finance and Verde Corporate Finance are the most active teams that we have encountered locally. Plus PWC runs their Raise Programme helping high growth companies raise between £1 and £30m on a success fee basis.

We also maintain a list of the investors we have encountered and can happily run a quick search to select a handful of targets for you.  Please get in touch with us if that would be helpful. 

We’ve compiled a list of current and recent grants and funds that could be of interest. 

• The Newable/BBI £10m Co-Investment fund was announced in November 2020
• In December 2020 Science Creates Ventures announced a new £15m equity investment fund for academic spinout companies and deeptech. 
• UWE ran the Digital Innovation Fund in 2019 and 2020, we hope to see further rounds in the future.
• WECA offered the Business Innovation Fund for the first time in 2020, applications are now closed but it’s worth keeping an eye out for future rounds.
• Creative England, whose HQ is in Bristol, have a Creative Growth Finance fund with Triodos Bank
• SWIG Finance offer business loans across the South West including Startup Loans:  (debt funding)
• Cornwall and Isles of Scilly Investment Fund: https://www.ciosif.co.uk/ (debt and equity fund)
• Creative Growth Finance – a collaboration between Triodos Bank and Creative England to deliver £100k – £500k debt funding to growing Creative businesses.

Finally, there is a newer breed of Social Impact investors, this list is growing quickly, the organisations we have found locally are:

• Seedbed
• Bristol City Funds
• Bristol and Bath Regional Capital
• Resonance
• Quartet Community Foundation
• Fredericks Foundation 
• Sustainable Technologies Business Acceleration hub
• Fair by Design Fund – Ascension Ventures

Innovation grants

Do you have a game-changing idea? An innovation grant could be the ideal route for your organisation to take. This is essentially a sum of money awarded by the government or other organisations to help accelerate your project. 

The process is highly competitive, however, if you’re successful it means securing funding without entering debt or releasing any equity. There are also organisations in the South West who can offer bespoke help when it comes to submitting grant applications.

One example of a firm that specialises in this is Granted. You can access their detailed breakdown on how to apply for innovation funding here and see the current funding opportunities here. If any available funds match up with your innovation project, do reach out to the team for support.

Investor partnerships 

Another alternative is to utilise investor partnership initiatives. This route seeks to make equity go further by fusing it with grant funding for R&D heavy projects.

UK Research and Innovation runs a programme that brings together Innovate UK’s use of grant funding, and investor partners’ aligned funding and expertise.

Its aim is to stimulate research and development in micro, small and medium-sized enterprises, while accelerating equity investment into those companies so that they can grow more rapidly through innovation.

This initiative is ongoing until 2025, with an overall budget of £80 million over three years. You can find more information and apply here.