WHERE LOCAL BUSINESS GROWS

Venture capital



Overview
 

Venture capital funding is a form of private equity investment where a business obtains long-term funding in exchange for a share of its equity.

Venture capital funding is mainly used by start-ups or new businesses with high growth potential, ie technology start-ups. Businesses can also use it to expand, fund management buy-outs or buy-ins, or develop new products.

There are four main types of private equity funds:

  • Independent funds - the most common form of private equity fund. Their capital is supplied by third parties, with no one party holding a majority stake
  • Captive funds - have one major shareholder, contributing most of the capital. A captive fund can be a subsidiary of a bank or an insurance company, or an industrial company looking to invest in its own sector
  • Semi-captive funds - have a majority shareholder, but also significant minority shareholders. They can be subsidiaries of financial institutions or run as separate companies
  • Public sector funds are made up of capital supplied partly or completely by the public sector
Venture capitalists typically invest in businesses with:
  • a minimum investment need of around £2 million, though smaller regional venture capital organisations may invest from £50,000
  • an ambitious but realistic business plan
  • a product or service that offers a unique selling point or other competitive advantage
  • a large earning potential and a high return on investment within a specific timeframe, eg five years
  • sound management expertise - although venture capitalists tend not to get involved in the day-to-day running of the business, they often help with a business' strategy

The process
 

You should research what type of private equity funding your business needs. Different types of investment are suitable for different stages of business development:

  • Seed financing - funding while you research and develop a project or concept until you are ready to launch a company. This form of private equity is mainly provided by business angels
  • Start-up financing - to help you develop a product and begin marketing it. This sort of funding is often based on your business plan and venture capital investors may often join your company to help bring the product to market
  • Post-creation funding - capital used to finance manufacturing a product and a sales drive, so your company can begin to make profits
  • Expansion and development - investment is used to increase production capacity and sales activity. Funding is often provided by new venture capital investors attracted by previous significant investments in the company
You should make sure that your business plan is up to date with detailed financial forecasts tailored to the investor. Business plans are used by investment managers to assess:
  • your business' funding needs
  • whether your plans for the business are achievable
  • whether you need external investment
Making your business investment ready

Your business also needs to be ‘investment ready’, which means providing:
  • audited accounts for the past two years
  • evidence of current performance
  • profit-and-loss forecast for next year
  • business bank statements for the past six months
  • profiles of each partner or director in your business
Data confidentiality

Once a venture capital investor firm has shown interest in your outline proposals, you can prepare a letter of confidentiality. This should be signed both by your business and the potential investors before you send them your full business plan.

Data confidentiality can be an important issue for smaller companies applying for investment, particularly where proposals contain details of commercially valuable products or strategies.

Download a sample venture capital investment proposal confidentiality letter (DOC, 33K)

Pros and cons
 

Pros

  • venture capital funding is committed and long term
  • you retain management control of your business – investors will not get involved in the day-to-day running of your business
  • no need for collateral, ie personal assets
  • no repayments or interest
Cons
  • giving up a share in your business
  • raising venture capital is demanding, costly and time consuming
  • not generally suitable for small investments
  • can take a while to find a suitable venture capital investor

Common mistakes
 

You may be refused venture capital finance because you haven’t made sure that you are ‘investment ready’ before approaching potential investors. For more information, see Getting ready for funding.

Investors will want to know if there will be an exit opportunity and that they can recover their investment and make a profit. You should be able to tell them about your business’ long-term plans and ambitions.

Choosing the right venture capital firm will increase your chances of success. You should consider:

  • the stage of your business’ development or the type of investment required
  • your industry
  • the amount of finance you need
  • your geographic location

Funding sources
 

You can use the British Private Equity and Venture Capital Association (BVCA) membership directory to find venture capital investors. However, you will need to subscribe to get access.

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News

3 results found 
Huddersfield house developer doubles target to raise £22,000 for charity

Friday 26 May 2017

Huddersfield-based house developer SB Homes has more than doubled its charity ball fundraising target, making £22,000 for two local charities. The event was organised to mark the firm’s 20th anniversary and took place at Casa in Brighouse on Saturday evening. Kirkwood Hospice and Forget Me Not Children’s Hospice will receive an equal split of the vital funds raised. A total of 214 friends, family, suppliers, clients and business people from the property industry attended the ball. They were greeted with a drinks reception, followed by a three-course dinner, dancing, casino tables and live music from musician Steven Heath. Stephen Byram, managing director of SB Homes said: “The ball went really well, the atmosphere was great and the singer got everyone up dancing. We wanted to have a fantastic night for our 20th year in business. But more than that, we also set out to support causes that are really important for our town. “Most people within West Yorkshire know someone who has been supported in some way by these hospices. Kirkwood Hospice is particularly close to me and my family — my wife’s nana passed away there five years ago, and my mum attends their weekly support sessions. She has made lots of friends and her confidence has skyrocketed since going there. In fact, she’d rather go to Kirkwood than have a holiday! What they do is genuinely incredible.” Both charities care for local people and children living with life-limiting illnesses and provide support for their families and friends, free of charge. Kate Leadbeater, Partnership Development Manager at Kirkwood Hospice said: “Kirkwood Hospice really is very lucky to have SB Homes as a supporter and we appreciate everything that they have done for us. Their generosity will make a huge difference to those in Kirklees who rely on our services. “It’s also quite poignant that the firm chose to support us in its 20th year, just as we are celebrating our 30th year!” Samantha Loucas, corporate fundraiser at Forget Me Not Children’s Hospice added: “We are so grateful that SB Homes chose to support us — £22,000 is a fantastic achievement and we truly can’t thank them enough!” Huddersfield Interiors was the event’s headline sponsor, with other main associates including Newlay, Easy Bathrooms and Ramsdens Solicitors. The final total of over £22,000 was raised from a combination of ticket sales, sponsorship funds, donations, a live charity auction, a table fundraiser and silent auction organised by See It Now Sports. Lots included a diamond, catered chalet holiday in French Alps, signed Anthony Joshua shorts and a break to New York, to name a few. Early next month, SB Homes will launch phase two of its Empire Works development in Slaithwaite, Huddersfield as well as a show home. The properties include 24 2-bedroom apartments, as well as four 4-bedroom family houses.
Posted by Byram, Amy
Yorkshire businesses get behind £10k fundraising campaign

Tuesday 04 April 2017

As preparations for the charity football initiative ‘The Match 2017’ continue to gain momentum, the latest supporters to get on board are Huddersfield-based businesses Magic Rock Brewing and Lindley Financial Management. The inaugural event, which will take place on Saturday 20th May at The MBI Shay Stadium in Halifax, will bring together footballing amateurs and Huddersfield Town legends, in a game that will help to raise much needed funds for Yorkshire Air Ambulance. Both firms have dug deep for the cause, and have each donated £500 in return for becoming an official shirt sponsor. With a running cost of £12,000 per day for the two yellow helicopters to remain active, the organisation relies entirely on donations to continue saving lives. And now further support is required to keep The Match proceeds growing, and help this initiative reach its £10,000 target. Magic Rock Brewing was founded by brothers Richard and Jonny Burhouse and inspired by brewing traditions and the US craft beer scene in particular. The award-winning and ever-growing company produces an innovative range of idiosyncratic beers in their 4,000sqft Tap Room, close to the town centre. When approached via social media and asked to get behind The Match, Richard says there was never any doubt about getting involved: “We are a community focused business, keen to support local initiatives wherever possible. We are aware of the excellent work the air ambulance does for the region, and wanted to do our bit.” Regular charity supporters Lindley Financial Management also had no qualms about signing up to help the event. The independent financial advisers, based in Brighouse, also support Pilgrim Bandits Charity, aiding soldier amputees injured in Iraq and Afghanistan. Commenting on The Match, director Mark Learmont, said: “I hope as many people as possible attend on May 20th. Nobody knows when they may need the help of the Yorkshire Air Ambulance – supporting them is vital and their services must be applauded.” Organiser, and founder of grassroots football specialists Coaches Club, Dave Learmont, adds: “I am so thankful that two local businesses have gone the extra mile to raise awareness and proceeds for this fantastic charity. 100% of all funds donated will go to Yorkshire Air Ambulance, and these shirt sponsorships put us well on our way to hitting our huge target.” But the search for sponsors isn’t over, with the players themselves now looking for individual support. For only £150, companies will secure their name and details on the official match website, alongside their logo on the programme. The players and Town legends are also appealing for members of the public to get on board and buy tickets. Available at £10 for adults and £5 for children, the aim is to provide a fun, low cost day out for all the family. Pre-match and half-time entertainment – as well as a couple of extra special guests – will be revealed over the coming weeks. All tickets must be purchased before the game, via justgiving.com/teams/coaches-club. Further information and updates about The Match and player sponsorship can be found at The Coaches Club website, and on Twitter @cccmatch.
Posted by Scriba PR Limited
Vizulate becomes Approved Supplier on Digital Enterprise scheme

Friday 10 March 2017

Vizulate Digital is delighted to announce that we have been named as an approved supplier on the Leeds City Region Digital Enterprise scheme, which allows eligible small and medium sized businesses across Yorkshire to ‘Invest in Digital’. Running until March 2019, the Digital Enterprise scheme aims to support the growth and development of SMEs in the region through investment in digital skills and technology. Eligible businesses will be able to apply for 40% funding towards the cost of digital projects including digital marketing, social media, web design and development, e-commerce and more – up to a maximum of £5,000. The Digital Growth Vouchers could also fund part of the cost of technology upgrades such as IT and telecoms and, if approved, the business will then only have to cover the remaining 60% of the cost. The Digital Enterprise scheme is a partnership programme which is partly funded by the European Union (European Regional Development Fund), the West Yorkshire Combined Authority/Leeds city region Local Enterprise Partnership (LEP) and the 9 local authorities which form part of the Leeds city region – Leeds, Calderdale, Kirklees, Bradford, Selby, Craven, Harrogate, York and Wakefield. As approved suppliers on the Digital Enterprise scheme with over 10 years’ experience we are able to offer the full range of digital services including: Website Design & Development E-Commerce Digital Marketing Social Media Search Engine Optimisation (SEO) Online Advertising (Google AdWords, Facebook Ads etc.) Video & Animation Integrated Digital Solutions Web Hosting & Email Through our trusted partners we can also provide IT and telecoms solutions. We believe digital marketing represents the single biggest opportunity for businesses to achieve growth.
Posted by Vizulate Digital
3 results found 
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