Fast FAQs

How do I find people who would be prepared to put venture capital into my business?

You could spend a very long time going nowhere if you try to tackle this one on your own. Your best bet is to tap into an existing network of venture capital providers, by way of a lawyer or accountant who specialises in providing services to SMEs (small to medium-sized enterprises), or possibly by way of your local Business Link.

There are also brokers who claim to offer introductions to venture capital sources. Their services are variable in quality and can prove expensive.

The intermediary, whoever he (or she) is, should be able to guide you on incorporating your business (ie making it a company), if it is not one already. This is an essential first step. He should then be able to give you a good idea of what individual venture capital providers are looking for, and what they are likely to offer in return. He may be able to steer you towards the providers most likely to be interested in your project, and he may be willing to advise on your presentation, to maximise your chances of success.

Of course, none of this will come cheap, so you need to set a budget for the costs of raising capital. Lawyers and accountants will normally work on a fee per hour worked. Brokers will look to receiving a percentage of the sum raised. Some may also expect a bonus payment for success in raising capital for you. Bear in mind that payment may be due whether or not you actually succeed in raising money. At a very rough estimate, a successful small company in a conventional business would probably have to pay between £10,000 and £25,000 in fees, to raise £250,000.

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