Finding funding for your spinout
You have your technology and your business plan – now you need investment
To get to the position where your spinout can secure its first customers, you will usually have to spend a lot of money building your company and developing your technology. Your company will usually need to raise these funds before it can make money through sales. Where does that money come from?
There are many ways to raise money, including:
- Investors: individuals (‘angel investors’) or organisations (‘venture capital’) that invest in new companies and receive part ownership in return – see below
- Grants and translational funds: money that doesn’t have to be paid back or impact company ownership, from (often government-related) organisations that support new businesses like UK Research and Innovation
- Crowdfunding: services that make it easy to raise smaller amounts of money from large numbers of people; this money can be a donation, reward-based (where you provide them with something in exchange, e.g. one of your products once it has gone into production), or an investment
- Friends and family: personal contacts who may provide early funding, either as a gift, loan or investment
- Customers: certain types of products or services can be brought to market very quickly, providing income the business can use to grow organically
In addition to providing cash to fund your business, investment can sometimes benefit your company by providing extra credibility or access to the expertise and resources of investors.
However, raising investment is for many founders the most unfamiliar and challenging part of creating a spinout company, which is why the expert teams in Imperial Enterprise are here to support you.