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Coming up with an innovative idea for a science and tech business is the first step on the road to success. But, you will already be aware that this can be a long road. One of the major obstacles for any science and tech business is getting the funding required to get the idea off the ground. There are several possibilities for a science and tech business to explore when it comes to having the cash to develop the business and take it to market. Here are some of the options available –
Going to your bank
Traditionally this was the main route to gain funding for a new business and to develop an idea. As the financial crash of the last decade hit, the banks started to tighten up their lending criteria. It sometimes feels like these criteria are still too tight for a startup business to access.
But that doesn’t have to be the case. At Harlands, we work with strategic partners who have the experience and contacts to explore the market and deliver workable solutions for the science and tech industry as well as the rest of the economy. Knowing your financial situation helps, so speak to us and find out how we can help.
A more recent phenomenon is that of crowdfunding where you look to the general public to support your aspirations for growth. Sites such as Crowdfunder are a good place to showcase your offer and seek the finance needed for growth. You will give away a certain amount of equity or offer incentives in exchange for the cash that will sustain and power your development.
You should research carefully and seek advice before committing to a crowdfunding project. As with every other part of business, you will want to know the risks and opportunities that this form of funding can bring.
Grants and incentives
The UK government is looking to support the science and tech industries to develop and be as competitive as possible. Attracting overseas investment and developing as a centre of excellence are all part of the government strategy. This has taken on new importance with Brexit on the near horizon and the idea of striking trade deals with nations across the world.
There are incentives available for a number of projects and you can research whether these might work for your business. There is a funding section on the government website that will help you understand what is potentially available. Take a look and see what it means for you.
Friends and Family
This is still a popular way to generate the funds to get a business idea off the ground. If the people around you believe in you and your idea, then they may be happy to support the development in exchange for a share in the business.
You should proceed with some caution in this area of funding. It should be treated as any other business transaction and legal contracts should be drawn up. Protecting both sides is of paramount importance. Don’t let this get in the way of friendship or family bonds.
Think the BBC TV programme Dragons’ Den for this one, but without the TV cameras, showboating and pressure from your potential investors. There are many private individuals out there that are looking to invest in a business that they can see exciting potential in. As you start to make your way in the business world, you will meet people like this and be able to open conversations with them about your venture.
Just as with friends and family, you will need to ensure that all legal angels are covered. You will be talking to people who have walked along this road many times before. Treat them as a partner in your business and the relationship can be a good one.
R&D tax credits
Once you have been up and running for a while with expenses to match, then there is another government incentive that could really help your business. R&D tax credits are there to give back to UK companies that have spent money on new products or processes, as well as those that have improved what they already do in these areas. Science and tech businesses are ideal candidates for this incentive. Get in touch if you want to know more. We are experts in R&D tax and would love to speak to you about a potential claim.