News About Startups, Entrepreneurs & Angel Investors
You can read all the latest news and updates from the Angel Investment Network. You can check out our recent press releases and also find special offers for startups, along with all the latest news for investors.
The angel investment and entrepreneurship marketplace are extremely fast paced sectors, and it is a good idea to keep up-to-date with all the latest developments that you need to know about to help make informed business decisions. At the Angel Investment Network, we are here to help support all your business activities.
Ben Hallett is the CEO and co-founder of fast growing EdTech companyVygo,built to ensure no student is left behind. In the latest Behind The Raise interview he talks to AIN about creating equality in education, scaling fast and pivoting, the reasons for rising investor interest in EdTech and how to avoid wasting time when fundraising.
Tell us about Vygo and how you came up with the idea? While studying at university, myself and my co-founder witnessed too many of our peers struggling, falling through the cracks and ultimately falling short of their potential. With further research we discovered that the problem was global with 30-50% of students dropping out of higher education and most students struggling with severe or debilitating stress. We discovered that one of the core challenges is helping students connect with the support they need when they need it and we couldn’t see anyone else meaningfully solving this. This set us out on a mission to ensure that every learner has equal access to the support they need, when they need it, so that they can reach their full potential.
What is the problem you are looking to solve? Equality in education.
How did you get the business off the ground? At first we built a minimum viable solution (MVP) which enabled students to academically support each other. We saw a overwhelming student response to and universities started asking us to lease the platform. We ran the impact and revenue numbers and after that decided to adapt the platform to be B2B SaaS. It’s accelerated since then.
What traction have you seen? We’re now working with universities across APAC, EMEA and North America, consistently doubling or tripling growth every year and have raised over $3m in investment.
Why has there been such increased investor interest in EdTech? Better education is at the root of almost every challenge the world is facing. The pandemic exposed a lot of the weaknesses in the education system and further catalysed everyone interest in EdTech, including investors.
What initially attracted investors to your company? Our first round of angels mostly invested in Vygo because they believed in the founders’ conviction around the mission and our horsepower to bring it into reality.
What is your top tip for anyone raising investment for the first time? Nail your authentic story telling. If you feel like you don’t have an authentic story, dig deeper, you have one, find it and obsess over it.
My biggest fundraising mistake has been… Limiting myself to close proximating investors, I wasted a lot of time with pools of investors that expected global standards of traction but only wanted to give us “local market standard” terms. We all now have access to global capital so in the same way that investors will have global benchmarks for your traction, startups should have global benchmark expectations for investment terms.
If you had a magic wand and could wave it, what would you wish for to improve the fundraising process for startups? I would wave that wand to create much more transparency from investors and startups about each other, the deals the are doing and the journey ahead. I’m a big believer that honesty and integrity leads to better deals. I’d wave my wand for something similar to the ingredients list and health ratings on food packaging. I’d love everyone to post the specifics of their deals ($, valuation, special terms, traction, TAM/SAM/SOM, etc.). This would save startups so much money and time spent in negotiation and lawyers. Of course this would create another suite of issues to be solved BUT it’s my magic wand.
In our latest guest post David Pattison, experienced angel investor, business leader and author, considers the thorny question of investor due diligence. Is it a threat or or an opportunity? Or a bit of both?
If you are trying to raise money, there will be a requirement for the company (and often the management) to go through a Due Diligence (DD) process. This is where the prospective investors will take a deeper look you and your business.
If the investors are individuals or angels then the DD can be quite light touch, usually involving an interrogation of the business plan, some conversations with the team and maybe some customers or current investors. If they are funds or institutions, then they will take an almost forensic look and ask you to provide a mountain of information.
This can cover Finance, Legal, Commercial, Tech, Management, Sales and Marketing, Security. IP etc. They are looking for weaknesses, threats to the business, problems and anything that could be vaguely called illegal. Almost all of this will be done by sector experts often employed externally.
It’s a tough and distracting process. My personal experiences and most businesses I have spoken to about this process show it to be exhausting and emotionally difficult.
So is DD a threat or an opportunity, or a bit of both? The answer is that it depends. It is largely driven by the type of investor. It can be a threat if they are obsessed with just protecting their money, then it can feel negative and can erode the future relationship. It can be an opportunity if they are looking to help to build the business and see the future health of the business as the key to their investment paying off. As they will use the DD to come up with recommendations on how to improve practices and processes.
Whatever type of investor you have, DD will be part of the investment process. Here are some things you can do to help yourself:
Be well prepared. A founder of a company I worked with always said ‘run your business as if you are always about to enter DD.’ Make sure you always know where all the documents are and be prepared to share everything. You will be asked to set up a data room with all the company information in it. Why not set this up from the start of your business? It’s a good discipline and shows good business practice.
Spread the load. The CEO should not be the only source for DD. Spread it around the team. It shows confidence in the team and exposes the team to the investors. Have a DD data lead and if possible don’t make it the CEO. If they are a good team, then show them off.
DD is distracting. Do not underestimate the amount of time it takes to get through the DD process. Often it can be three months or more. Almost every business I know suffers a drop in performance during this period, always because the team is distracted. Try to minimise the effect by being well prepared in advance.
Don’t be afraid to say no. Investors can be lazy and will just ask for everything you have. If you think the information is not justified, then push back.
Set a time limit. At the start of the process set a date for when no more information will be provided, and no more questions will be answered. Doing this will ensure that the deal keeps moving forward and the advisers/specialists employed by the investors will not be tempted to over justify their fees by dragging it on.
Do not lie or cover up in DD. This is a forensic process and whatever you are trying to hide will be found. Good businesses with good practices should not be afraid of DD. Bad businesses should.
Just answer the questions. Sometimes you don’t know the answer to a question, don’t try and tap dance your way through it. Just say you don’t know and then find out the answer. Sometimes a finding will surprise you. Be surprised and then find out why you are.
Do not get emotional. This is the easiest thing to say and the hardest thing to do. You and your company will effectively be accused of all sorts of things. It can sound like you are a ‘fraudulent liar’ running an illegal money laundering crime syndicate (I am exaggerating a bit!). Unless you are then let it wash over you and try to explain why none of this is appropriate and here are the reasons why. Remember they are looking for weaknesses and that’s what they focus on.
If it’s not mentioned, you are probably doing it well. It’s very rare in DD that you get congratulated for doing something well and if you are it is usually in passing and buried in the small print. Don’t look for a lot of ‘pats on the back’. If the investment happens that is usually the sign that you have a good business.
Investors become partners. Try not to burn bridges with the people doing the investment. You will work with them after the investment is made, and friction early in the relationship rarely diminishes.
Two final things to remember about DD:
Firstly, it is, in effect, an extended interview. Part of that interview will be the ‘quick cup of coffee’ or ‘meet for a drink’. Everything you say will be noted. It’s important that you and your team are aligned and have the same answers to the same questions.
Secondly, DD is a two-way process. Ask the investor about their performance, who they work with. Talk to some of the companies they have invested in. Do your own DD and do not stop asking questions of them.
DD is hard and even if you are well prepared it is distracting and emotionally demanding. But it can make you a better business in the long run. Is DD a threat or an opportunity? A lot of it is up to you.
There has been a significant rise in the numbers of angel investors looking to back startups across the globe. Technology is the most popular sector and food and beverage seeing the fastest year on year growth. These are some of the key findings from Angel Investment Network’s annual analysis of the global state of angel investment funding based on data from their platform.
AIN has 40 networks extending to over 90 different countries; and now with more than 1.75 million users it is the largest angel investment community in the world. The results are a real barometer of global startup investment activity in 2022.
The data reveals there has been a significant rise in interest from investors looking to back businesses solving problems in a range of industries. There was a 6% increase in searches from angel investors looking for potential startup investments. Over the same period, the number of pitches fell by 7.5%, which highlights an increasingly positive ratio of investors to startups.
Technology remains the most popular sector for investors, with searches up 23% year-on-year. Software remains second, up 7%. Food and beverage is third with the fastest growth of all sectors, up 35% with a range of innovative ideas coming to market.
The finance sector becomes the fourth most popular sector, up 24% YoY, with huge interest in the FinTech space. However, there is a mismatch with it being only the 11th most popular sector for startup ideas. Meanwhile, interest in property has soared since the start of the pandemic, up more than 100%.
AgTech businesses remain in high demand and since the start of the pandemic have been one of the fastest risers.
Top 10 sectors for startups 1. Food and beverage 2. Property 3. Technology 4. Entertainment and leisure 5. Fashion & Beauty 6. Retail 7. Software 8. Agriculture 9. Manufacturing & Engineering 10. Hospitality, Restaurants & Bars
Top 10 sectors for investors 1. Technology 2. Software 3. Food & Beverage 4. Finance 5. Agriculture 6. Property 7. Medical & Sciences 8. Entertainment & Leisure 9. Energy & Natural Resources 10. Retail
According to Mike Lebus, founder of Angel Investment Network: “The results show the global startup ecosystem in good health. We are seeing a lot of pent-up demand from angel investors, who have held back during the pandemic and have accrued more capital that they are now looking to invest. Meanwhile entrepreneurs are now working harder at ensuring the proposals they are bringing forward are more fleshed out so we are seeing more quality over quantity in terms of nascent startup proposals. During a challenging period many have taken the sensible decision to bootstrap their businesses further and go for funding at a slightly later stage.”
Antony Yousefian is the co-founder of innovative agtech businesses Bx Technologies. In the latest Behind The Raise interview he talks to AIN about transforming farming, his lightbulb moment courtesy of cannabis growers, a near death epiphany, and a clever approach for refining your pitch for investors.
Tell us about Bx Technologies and how you came up with the idea?
Bx Technologies helps farmers switch to climate friendly practices by measuring the climate-impact of produce, and putting that information on food. We do this via our software technology that quantifies farmers’ positive impact on improving their soil. We then sell that as a service. This enables farmers to differentiate their crops from others.
My co-founder Ben Bardsley is a 5th generation farmer and my background is in asset management where I was involved in the initial waves of cleantech. So we really understood the challenges in this space. Both on the ground and the economics behind it.
What is the problem you are looking to solve? Food production systems are the main driver for 70% biodiversity loss and over 30% of greenhouse emissions globally. With the pressure to feed the growing world, this is creating a negative feedback loop, we are incentivising farmers to produce food as cheap as possible, at the expense of the planet.
Our soils are our biggest carbon sink. They can hold three times the amount of carbon versus air. However through the use of damaging chemical inputs and pursuit of cheap yields, we are turning our biggest source of carbon capture into an emitter.
There is now a clear realisation this needs to change, but helping farmers to transition is critical. Many farmers are also in the red, with many farms only covering costs with the farming subsidy. I have to give a shout out to Jeremy Clarkson for bringing this to life in his series on Prime. Supermarket and food brands are under pressure to reduce their emissions – with the majority coming from farms. So what if we could use technology to quantify farmers who improve the soil, share that knowledge and incentivise more of it?
What was your lightbulb moment? My personal “ah ha” moment was when I was working with medicinal cannabis growers in North America with a Dutch agtech company 30MHz. They seemed to be optimising the crop by improving the soil health. The byproduct or result of this was putting more carbon back into the soil.
They did this because they were incentivised by their buyers (pharmaceutical companies) who paid more for higher nutrients or therapeutic effects from the crop. When I quizzed these growers and said, “Why don’t you do this for food? Their response was, “Yes we should” and I asked them “why don’t you do it then?”. Their response was “There is no money, there is no incentive”.
This was where my two worlds collided together. I had left the finance industry where more than 30% of assets had an ESG mandate and looking to invest in impact. Here is one of the most important industries in the world, which can grow in a way which repairs and improves the soil and our planet.
No amount of agtech or robotic automation was going to solve this. We had to either pay growers more for what they did or help them earn new revenue streams. For example repairing nature or putting carbon back into soil. Where it belongs by the way! It is how nature has been designing it for 3.8 bn years.
How did you get the business off the ground? Thanks to my co-founder Ben. He had been on a remarkable journey, coming back into his family farming business in 2013, after being a leader in the British army, who was shot on the front line in Afghanistan. He had a realisation in the moment of being shot that if he did survive, he needed to focus on something that would truly make a difference. He realised the farm would have to change if it was going to survive. He made the brave decision to stop investing in new trees for his farm, and agreed to set-up and incubate Bx within his farm business.
My role was to build out the capability to measure the positive impact in the soil (more carbon), quantify it and find a way to sell it. We had the perfect incubator and the envy of many Agtechs, where we had 800ha of playground to test and iterate. We were able to go fast, test and iterate with a market leader in the industry at scale.
It worked. Bardsley England became verified as Carbon Negative. Bx supported the farming business to win a multi-year contract with a supermarket. There we saw a brand or retailer willing to pay more for planet positive produce. We had proved the model.
What traction have you seen? Food Brands are under pressure and also have made commitments to remove emissions. The majority of their emissions are occurring on farms. For example for Nestle 90% of their total emissions come from scope 3 (ingredients, farming). Working with brands directly, we have found they are willing to pay more for carbon removal. In some cases 10x more than carbon credits farmers are selling for today (£15/t Co2e). Consumers want this to happen and brands can capture market share and premium. We have seen fantastic traction with leading food brands in the UK, and have our first international customers in the US and NZ.
Why are you raising investment now? We are raising to push out our series A raise (Early 2023), deliver the MVP for these first customers, including discussions with a major UK supermarket. We can double down resources on data-science, build on our machine learning capability and automate data-collection on the farm. This will give us the foundations, readying us to scale up with a supermarket and larger global brands in 2023.
What initially attracted investors to your company? We are told it is our story and the experience of the team. We understand farming and the food chain deeply, the problems that exist including in agtech development. Bringing together data-science and experience from sectors including legit money making games, media and finance.
Our business model has been attractive to investors which is centred around incentivising a transformation in the food system. We are able to quantify impact and reward it explicitly. One of our first investors was Counteract, a carbon removal VC. They understand this space well and the potential for soil to remove carbon at scale.
How important are startups in helping to solve climate change? And how can their ideas be best facilitated to tackle the existential threat to our planet? This is probably where us and Counteract see eye to eye. We believe it is going to take big bold bets NOW, not later to prevent a disaster. We need entrepreneurs with clear vision and backed by passionate impact investors who want to make a difference. Waiting for validation of business models is going to be too late. We have less than 8 years in the current carbon budget (1.5c warming-) and we need to start creating disruptive changes to industries. As Larry Fink (Blackrock CEO) said recently, the next 1,000 unicorns will be climatetech.
What is your top tip for anyone raising investment for the first time? Take time to do your homework on the investors you want to approach. Obviously capital/cash is one of the main drivers but investors can add a lot of value. For us now, patience, impact, food, ag. capital is best for us.
For Bx right now, Angel Investment Network is perfect for us. Though in 12 months time, we are looking for investors who understand how to build an AI business. The expectations and go to market are different versus say an enterprise SaaS solution.
Another tip, once you have done the above, make a tier list and go to the tier 3 first and then end of tier 1. You will have refined the pitch, the deck and your data room.
My biggest fundraising mistake has been… From a previous life, not doing the homework on the investors and bringing in the wrong type of investor. They wanted acceleration of commercialisation vs product development. This took us down a wrong path and stalled our growth.
If you had a magic wand and could wave it what would you wish for to improve the fundraising process for startups? Reduce the time needed. It would be great, if investors were able to look into a business remotely and it didn’t require any significant time from the founders of the business. It’s catch 22 though, you need to educate investors about your business but some of the most valuable people driving the business forward are out of the business for months on end.
Bx Technologies are currently raising. Please contact Sam Louis for more information – firstname.lastname@example.org
In this article, founder and CEO of Addition Finance Graham Davies explains how automation can help small businesses create scalable processes and promote growth.
The average startup is working with extremely limited resources and manpower in its early days. As cash is king, it’s easy to focus all your time and effort on delivering your product. This is natural and understandable. However, it’s also why founders are hitting burnout at record levels as they try to stay afloat while under pressure from wearing multiple hats. Attempting to manage everything, alone and all at once, isn’t only dangerous – it’s also ineffective.
“Well who else is going to do it?”. I hear you. It’s tough being an entrepreneur – especially when you’re just starting out. Maybe you’d love to outsource the bulk of the grunt work, or expand your team, but money’s tight and you’re not quite there yet. If this is you (and even if it’s not), automation is your friend.
Automation can help streamline workflows and reduce manual tasks – giving you (or your team) more time to focus on the human elements of growing a business, such as sales or customer service.
When wielded with precision, an AI toolkit is the perfect ally for startups – wherever you’re at on your business journey.
Let’s break this down.
1. Processing Power
The power of streamlined processes can’t be understated. Regardless of how big your team grows, you want your product or service to be delivered in a consistent way. This builds trust, brand loyalty and credibility.
Workflow automation leader Zapier sums up its purpose very clearly in its Quick Start Guide: ‘The heart of any automation boils down to a simple command: WHEN and DO. “When this happens, do that.” Even the most complex automation can be broken down into this simple command.’
For example: when you get a lead from your ‘Get in Touch’ website form, the ‘do’ would be to have an automatic message sent to your sales team. This is a very basic workflow process, but it ensures that no leads are slipping through the cracks.
It may sound obvious, but always have your team test the trial version before committing. Different tools serve different workflow styles. We love Zapier and Make (formerly Integromat) at Addition. These are highly effective tools, but they do require training to use. Consider either hiring an automation specialist or investing in a training course for one of your team.
TOP TIP: Ask a sales rep to walk you through a demo on a call and answer any questions. This will help you determine whether the tool is really the best for your business. There’s sometimes wiggle room for price negotiation as well (if you don’t ask, you don’t get).
2. Less hard, more smart
It’s not how many hours you work, or even how hard you work – it’s how smart you work. Diligently scraping data together into an Excel sheet, or manually emailing cold leads is a noble effort, but it isn’t going to help you scale. In fact, quite the opposite – it will slow you down and hinder growth.
Using automated software for process-heavy tasks is like using a dishwasher or tumble dryer. You could do without them – but the rate of progress isn’t even comparable.
TOP TIP: Lead generation, nurturing and conversion is one of the most common areas for automation. Tools like Hubspot and Mailchimp are giants in this space and for good reason. Hubspot has a wealth of free guides, ebooks and certified courses on all kinds of automated marketing processes. If you haven’t checked them out yet, it’s definitely worth the effort.
3. Right on the money
Money, money, money. Businesses spend it, earn it and invest it. Keeping track of ingoings and outgoings is a lot easier with automation. There’s a wealth of bookkeeping and accounting software to choose from. Just picture it – a platform where you can raise and pay invoices, balance the books and manage your taxes, all in one place. Major leg-up for your company, right?
TOP TIP: Speaking from experience, Xero is the number one tool to beat. Why? Its open API syncs with over 1000 other apps (Stripe, Paypal etc). Also, optional add-ons like Payroll or Xero Tax make it a limber tool that can grow with your business. We love it at Addition.
4. Track and trace
Ah the ‘key performance indicator’. We all know why they work – but figuring out how to get started is often just as difficult as keeping track. Automation can help you collate data to work with, like unique website visitors, conversion rates and domain rankings. When you already have a clear picture of where you’ve been and how you got there, it’s much easier to chart a path to where you want to go. And getting that information gets a lot easier by utilizing technology for your payroll.
TOP TIP: If you’re already automating things like your lead generation, the tool you’re working with probably has options to report back on KPIs. But if not, or if you’re looking for software that is KPI-tracking specific, here’s a list of some KPI Dashboard tools.
5. Checks and balances
AI is by no means flawless. You’ll often find the ‘computer says no’ scenarios crop up where the situation isn’t cut and dry. This is where the human touch comes in – and it’s important to keep the right balance between program and person.
Focus your AI use on process-heavy tasks (like generating templates and reports, extracting and importing data scraped from multiple sources, or auto-filling forms). You can then channel that extra time and manpower into stellar customer service. Never underestimate the power of a sincere note or phone call when your clients hit a snag. And always double check your AI’s final product – just in case the computer said no when it should’ve said “let’s talk”.
TOP TIP: While the pandemic has given remote working and automated processes a huge boost, the need for human connection is also at an all-time high. If you don’t have the budget for a permanent physical office, look into shared professional spaces (like WeWork) where you can offer clients face-to-face meetings to build trust and relationships (and host company socials!).
It may take a bit of fine-tuning and digging, but the right tools to take your business further, faster are definitely out there.
However, automation can be much more than a tool to save money and scale quickly. Setting up efficient workflows through automation requires you to think about every process on a granular level and will give you a unique understanding of your business.
Addition offer outsourced financial services for startups in the UK and US.
When it comes to launching a brand-new startup business many entrepreneurs miscalculate how expensive it is to launch, and what sorts of things that they will need to spend money on to make their business successful.
We explore some of the main start-up costs that efficient small businesses owners may need to consider when they set up a new business. Not all these business startup costs apply to absolutely every business, but they might apply to certain types of business. Also, many of these costs will apply to all businesses, so it is a good idea to familiarize yourself with some of the common expenses and business costs that entrepreneurs should have planned and covered for in their business plan, and for employees forms, the use of a w9 creator can be the best choice.
Research & Development Costs
When it comes to research and development, the costs here can be astronomical depending on what it is you are hoping to release. If you are bringing a brand-new concept to market, the cost of development might be so high that you will immediately require third party investment into your business. If you’re an entrepreneur with an existing track record, this might come from venture capital companies.
These costs do not apply to everyone. Some businesses do not really have much exposure to research and development outgoings, aide from some basic market research. This is especially true if the organization is being built on your own skills or as a services company.
Although you could start your business on the side unofficially, as soon as you need to grow and lay some proper foundations for your business down, you will need to register it, and this will incur some incorporation costs.
The cost for incorporating your business is dependent on your own local market. For instance, the cost varies at a state level in the US. You will also need some documentation created depending on the type of company that you intend to create. With that in mind you may need to hire an expert to help you incorporate your company correctly, so you may need to factor this in as well. However, this expense is typically a one-time cost, and the fees are quite low in comparison to other things that you will need to invest in for your business.
You may also need to look at specific business licenses covering the area that you want to work in. These might be one-off costs or re-occurring but often you’ll need to get these before you begin trading so you should include them at the time of incorporation or trading if there is going to be a big delay between the two points.
Real Estate & Property Costs
When it comes to office space, warehouse space and retail space in general, the costs can range from effectively zero to a huge amount of money unless you know about healthcare logistics uk who are cost friendly. It all depends on what sort of business you will be running and what your operational needs are. You can turn your office space, warehouse space and retail space into a positive environment through the help of reputable architectural signage companies!
If you are looking to launch a new business, one question you need to ask yourself is whether your business model can operate without office space in the first place. Many businesses today can run just as well with its team members working from home. When starting a brand-new business, it is a good idea to trim the expenses and costs down as far as you can, and often, renting or leasing expensive office space is a good way to burn through your finances quickly, without much to show for it.
Of course, some businesses require real estate, so this cost must be factored in. Size and location are the key factors to consider when choosing a retail property for your business. If you need to save some of your money on rental think about what your needs are and what location, you could base your business in.
Product, Tooling, Machinery
If your business sells physical products, then you will need to consider the costs of the products you sell. Retailers will look to source products from resellers, distributors and manufacturers and you will need to research where you can get your products from.
One problem is that many larger manufacturers won’t supply a new business with product directly, they will push you through to a reseller or distributor and even these companies can be picky with who they deal with since often they will look for a track record in retail and a decent credit score. Many new retailers find that the ‘doors are closed’, and it can be hard to buy product in the first place.
Other businesses that aren’t looking to sell other companies products look to create their own and bring a new product to the market. For these companies there is a different problem. How will the product be developed and produced?
Ultimately this will depend on the product you are creating. Sometimes it is a good idea to create the product yourself, but for this you may need tooling and machinery. Often, a different approach when a business first starts out is to outsource all of this to a third-party manufacturer. With this method a new business can at least get quotes and ascertain what the outgoing cost is going to be at an early stage, prior to investing in expensive machinery or tools. Often this is the preferred approach for a new business and many large multi-national companies also use this approach when manufacturing products for sale.
Another aspect that is overlooked that is relevant to this type of expense is shipping. Both from manufacturing plants and to your customers. It can be expensive and often it is an aspect that can be overlooked when calculating product profitability.
Business equipment is another expense that is often overlooked. Some brand-new startups can get away with just one computer or laptop to get started but many people do not consider that if they recruit employees, each of these individuals will likely require a laptop if they are office-based staff. This then leads to the need to go to the furniture store for office furniture such as desks and office chairs. Even things like the office kettle or coffee machine can fall into this category, so again, have a long hard think as to what you will need for your business. This also includes all the software packages you will need to buy.
You will need to buy office supplies, from coffee, to stationary and all sorts of other things that employees need in their day-to-day activities. These will also need to be replenished on a regular basis, so you’ll need to consider this in your general day-to-day business expenses.
When it comes to software often there are free versions that offer similar features to the main applications that many businesses use. Perhaps you can cut costs and use these instead in the beginning. Other software packages such as with accounting software, you may need something that is specialist, so you cannot cut cost easily for all packages. Either way, anywhere you can save money on your startup costs and ongoing expenditure is something worth doing since all these business costs add up, especially in the beginning.
If you’re thinking of opening a retail outlet, then you will need to fit it out and invest in a whole range of different things to Point of Sale equipment to shelving and signage. It’s a long list of things that you’ll need so you will have to set a lot of money aside for this aspect. Warehouses, specialist outlets and manufacturing plants come with their own types of expenses, and these costs can add up quickly, so it is a good idea to have a comprehensive plan as to what it is you need in terms of startup funding. Often the expenses are a lot higher than first expected.
Business Insurance & Cover
There are a lot of different business insurance products available, like the ones from business insurance uk, to help protect yourself when you are trading as a company. You might not need them all in the beginning, but lawsuits and claims can be expensive.
According to great professionals like these commercial public adjusters in Dania Beach, FL, some of the different types of business insurance products that might be applicable to your business (but not always all) might include: general liability insurance, professional liability insurance, product insurance, hazard insurance and insurance to cover issues with employees.
It is worth sitting down and going through the different insurance packages that are available to work out what you need and what doesn’t apply to your business type. It is an added expense to your outgoings but could make the difference to whether your business survives or fails if something is to occur that is unexpected. You’ll need to shop around to find out what the average cost of insurance is for your small business.
Recruitment, Employees, Outsourcing
Generally, a business needs people to service it and that’s where employees come into the picture. Payroll and salary expenses normally take up a huge amount of a businesses operating cash so you will need to factor in as to what employees you need and what budget you will need for them.
When evaluating how much an employee costs, you shouldn’t forget that they usually need items to do their job. Think about the uniforms, laptops, chairs, desks and even coffee! This also needs to be factored into your budgeting.
How are you going to find employees? If you use recruitment firms then these can be great at finding the right employee for your business, but they come with their own set of fees.
Often when a business is new it can be pragmatic to consider using freelances and external companies to service some of the areas of the business which you would need to typically need to hire a person for. One example might be too hire a third-party accounting firm to handle your books or to outsource your IT services. Although these costs can be high it is a lot easier to switch or cut back on an expense from another company than lay-off internal staff.
there are a wide range of professional services and freelancers that you might need for your business anyway, regardless of employees. These include accountancy firms, book-keeping, legal firms and lawyers to handle legal fees and issues, IT, and even marketing and advertising agencies, who all bring specialist skills into your business which you would otherwise have to recruit for. However if you or someone you love has sustained a traumatic brain injury, you’ll be needing good lawyers like TBI lawyer las vegas for the legal representation you need to make sure that you are fairly compensated.
Marketing & Advertising
Marketing and advertising is another area that you might need to spend money on as a business. If nobody knows about your product or service, how are you going to sell it? You need to get the word out about your new business and the way to do this is through marketing and advertising.
How much you may need to spend on marketing is dependent on your budget and your industry, but the good news is that there are some ways to reduce your marketing costs by utilizing some of the free marketing channels, such as social media. If you manage to get a post trending on social, then your customers can come in from that. Of course, social media is not always useful for every type of business, but it is one option out of many.
Most businesses these days have a website and if you’re an online business this might be a necessity. Building a web site can be expensive, but you can find free packages available for your site with free templates. You could pay someone to create a custom template, but if you’re looking to cut costs then a free one will get you started.
Once it’s time to launch your business then you will need to think about branding and design. This is something else you’ll need to spend money on at the beginning, because you will want something that looks professional and unique.
Types of Business Cost
When it comes to your business there are a lot of different costs, and these can be broken down into different expense types. Unfortunately, in the first year of trading there are a lot of different expenses and business needs, and this can have a big influence on your cash flow.
Some of the different business operating cost types are classified as:
Fixed and ongoing costs – these are the costs for your business that you cannot change. For example, your business property rent might be considered both fixed and on-going (even if it might be subject to change at some point or if you move location). In this case this is an expense that you need to factor in to pay your bills each month.
Variable costs – are the costs that can change depending on what happens in your business. Examples of variable costs are employee expenses and business travel.
One-time costs – These one-time expenses can be the big investments that your business needs, such as tooling and machinery, or even things like office equipment, such as laptops. You may occasionally need to replace items, but typically they can be classified as one-off costs. Often this is a type of upfront business cost that is quite high in the beginning.
How to Finance Your Business
So how do you finance your business? There are many ways to get the money to launch a new business. The question is what business finance method is right for your own startup?
Often new businesses are self-funded by the entrepreneurs own personal savings. You may even hear of businesses being launched off the back of someone’s credit card. These success stories are few and far between.
If you have a business idea but lack the funds to realize it, then you could look to outside sources for money for your business.
When you open a bank account you might expect that the lender will also offer you a small business loan. Unfortunately, that is not the case for most brand-new businesses and a line of credit is not open to most. Often, they will not even give you a business credit card.
The good news is that there are other financing options such as angel investment. Angel investors are high net worth individuals who look to invest in brand new businesses and startups in return for some equity in the business.
Often angel investors can help with business startup expenses or expansion costs and offer an invaluable service to would be entrepreneurs what have good business ideas but do not have the means to launch themselves with their own finances.
In our latest blog, Startup founder and AIN’s Head of Product & Growth Ching-Yun Huang looks at how early stage startups can tackle product development.
Developing and designing a product may seem like a daunting process for any startup founder. Indeed in AIN’s recent research on startup sentiment, we found concerns about building a product ranked as the second biggest concern for entrepreneurs, behind raising investment.
First of all, although you might have aspirations and aims to create the next tech giant and become a unicorn business in 5 years, your main focus should be toward the very first stage of the funding process – the early pre-seed round. The good news is that at this stage, you will not be expected to have anything close to a finished product. It is the idea and the understanding of the market that investors will be interested in.
So what are the first tentative steps in developing a product that is investable and potentially scalable?
What problem is your product solving?
Any product has to serve the ‘needs state’ the startup has identified. The two questions that must be asked are: a) Does what you have in mind solve your audience’s problems? b) Would they pay for it?
In respect to the first question – how do you establish a need for a product? Most successful product innovations will be based on the knowledge of experts in that market, because they have experienced it first-hand and know that enough people have the same problem. Having lavish technology is rarely the solution, but identifying the need and whether people might pay for it is. Investors will be looking at your experience of the market as well as your team and advisors.
If you can win early stage investors over with this proposition, you can then open the door to investing in the R&D and design to bring the idea to fruition.
Research your market Market research is obviously a good way to understand and test the need for your product. A good example of this would be Beauhurst, the data platform that helps businesses discover, track and understand high-growth companies, accelerators and funds. Before launching their now very established platform, they spoke to many people in their target audience (i.e. startup founders) and found out the sort of information they might need about companies they might be looking to do business with.
Similarly with Angel Investment Network, the idea came about after the founders James and Mike had multiple conversations with startup founders globally and found a real barrier to funding for those who didn’t already have an established network of contacts. It is now the world’s largest online angel investment platform.
Proving the concept The next stage is proving the concept. Looking at Beauhurst again, their approach was to gather all the information in a simple spreadsheet that they could sell to their audience. So the essence of the company was information, not a shiny platform to hold it in. Once they had feedback on the information, they could iterate in this basic format and build out the platform. Similarly for the developers of Google Sheets, they used Excel as their template and encouraged users to work with the BETA version. They could then see what functions users were using but also crucially not using. The engineers could then streamline things.
According to your box solution on how to choose the right soap box packaging, you can create a desire for your product with a few well-thought and well-placed words that pull the customer into a relationship with your brand and form a connection.
Can you piggyback off existing technology and save money Thinking you need to invent a new Facebook or Uber platform is the wrong starting point for bringing your idea to life. The early stages for any business are about survival. What is the simplest way to bring an MVP to life while you are pre-revenue? If you look at the development of Slack – this was based on an iteration of existing technology, MSN.
Slack began as an internal tool for Stewart Butterfield’s company, Tiny Speck, during the development of Glitch, an online game. It was based on an identified need; using a specific messaging channel for a topic using an established technique – a hashtag. It is of course far easier to build things that people are already using and then iterate. 8,000 customers signed up for the service within 24 hours of its launch in August 2013. Just 1.5 years later, they had 135,000 paying customers spread across 60,000 teams.
Similarly, Ant Group’s platform offering financial connectivity to billions as the world’s largest mobile and online payments platform just required a mobile phone and a QR code on any product or service, anywhere. QR already existed and didn’t require a lot of infrastructure associated with electronic payments cards, networks, terminals and merchant accounts.
Develop a road map Finally, while early stage investors won’t necessarily need to see a developed product, they will want to see that you have done the work on the stages from idea to activation. One approach can be to develop a goal-oriented roadmap. If you set it up, you have to follow it through, so they will hold you to this. There would be several elements of product strategy implementation:
Date – A deadline or timeframe for achieving a certain product goal. Name – The name of the digital product version you’re developing over a particular timeframe. Goal – An achievement your product should accomplish over a specific period of time. Features – A list of high-level features you need to implement to meet the product goals. Metrics – Success and performance indicators used to check if a certain goal was met.
So in summary, there are several steps that startups should consider in tackling product development. Focusing on the very pre-seed stage is crucial with investors not needing a finished product but instead a strong idea filling a gap in the market. This gap can be identified through research of peers, ideally from experts with a strong and established understanding of a particular market. The idea will need to solve the identified problem and be something people will be prepared to pay for.
If the idea can piggyback off an existing technology, this can be hugely effective and has been the proven approach for a series of tech unicorns. Finally, make sure you develop an effective product road map so that early stage investors can see a pathway to scalability.
Ching-Yun Huangis AIN’s Head of Product & Growth and is also CEO and co-founder of the Moment App.
Funding will help accelerate global borderless education support in higher education
Fast growing EdTech startup Vygo has raised £1.5m in a pre-seed funding round supported by Angel Investment Network, the world’s largest online angel investment platform. Vygo is a Saas platform reinventing the conventionalsocial support ecosystem in higher education.
Offering personalised support services beyond the physical campus, the business already works with a third of Australian Universities and is rapidly growing in the UK. The raise will help it expand in the UK and Europe and fuel its ambition to build borderless social education for every student.
The round was led by EdTech VC Sparkmind and supported by Angel Investment Network. Other participants include EdTech accelerator Supercharger Ventures and the Australian Catholic University. The funds will be used for platform development and expansion of its UK and European presence.
The demand for Vygo has soared in the past few years as a result of the increased demand for HE institutions to extend their support services digitally. A recent JISC study estimates that up to 96% of university students require additional access to support during their undergraduate degree. This demonstrates the need for support services to be more accessible than ever to ensure that students are getting the best educational experience possible.
Ben Hallett, Vygo CEO & Co-Founder, comments: “At Vygo, we believe that every human deserves a world-class education and that social experience is at the core of impactful learning. The Vygo platform gives every learner a social education community filled with their peers, mentors, tutors, advisors and other supporters. With Vygo, education institutions are able to reinvent their social support ecosystem online and ultimately improve their student outcomes whilst scaling their impact. We were delighted to work with AIN to find amazing investors and individuals through a well-streamlined process.”
According to Sam Louis, Director, Angel Investment Network: “We’ve worked with some fantastic EdTech startups in recent years – Ben and the Vygo team are right up there with the best of them. Their focus on the social and pastoral side of education resonated with us right away and, combined with significant international traction, investors within our network from right across the globe felt the same. The need for this platform has only accelerated in the past few years with so much learning being done remotely and we’re delighted to have helped Vygo on their journey.”
Olivia Sibony, AIN’s Head of Impact, looks at the rise in interest in green and clean tech startups and why we have seen a ‘perfect storm’ of conditions for their growth.
Over the past few years we have seen the perfect storm of conditions that have rocketed investor interest in green and clean tech startups. Looking at the patterns of investor keyword searches on the AIN global platform we have seen impressive growth for green business terms, including ‘renewables’, ‘greentech’ and ‘environmental’.
In the last three years these business ideas have gone from niche to mainstream with investors hungry for standout solutions for our manifold environmental challenges. The COP 26 conference further committed Governments to carbon reduction targets. As was acknowledged in Glasgow, it is private enterprise and nascent businesses that will provide many of the solutions.
Factors such as the recent surge in gas prices have made us more aware of the need to find alternative and renewable energy sources, alongside smart ways to reduce energy consumption.
Reasons behind rising interest
There are several reasons for the rising interest among investors.
Firstly, the increased global natural disasters with floods and wildfires closer to home have really brought this home to everyone. Including consumers, business leaders and governments.
We then saw COP 26 turning up the volume on the dialogue. This included recognition of the need for the ingenuity of businesses to come up with the solutions to the challenges we all face.
A third factor at play has been covid reframing people’s values on what really matters and the increasing interconnectedness of the planet.
Companies have realised they need to nurture theircustomers and the younger generation who have the most to lose are the most vocal in advocating for change. So they’ve shifted their focus which has opened up the supply chain market for a lot of B2B Climate Tech opportunities.
A further spur to action comes from companies also realising their employees increasingly care about the environmental impact of the companies they work with, so has also stimulated growth in this space.
Case study examples
This means more entrepreneurs are stimulated to build companies in this space as more investors see great commercial opportunities. As well as the obvious motivation for passion driven angel investors in investing in something that will provide a better future for them and their children. Over the past year through AIN, we have seen some impressive cleantech businesses being backed by our experienced angel investors.
Exciting businesses who have raised including cleantech business, eleXsys Energy who successfully raised £5m last year. They have developed a unique, enabling technology that will drive the transition of global energy grids to a clean energy future. Investors bought into their vision for their technology which enables commercial and industrial rooftops to become grid-connected, solar power plants.
Another business that has seen a great deal of investor interest is Zero Carbon Farms. They are a cutting edge AgTech company that builds and operates Controlled Environment Farms, providing a future-proof and sustainable solution for growing. They solve the problem of carbon generation in farms by providing up to 90% less water and a fraction of the space compared to conventional farming.
While Zero Carbon are dealing with sustainable production, Greyparrot – Co-founded by CEO Mikela Druckman, are applying cutting-edge deep-learning AI computer vision technology to the formidable problem of waste recycling. Their solution analyses waste on moving conveyor belts to allow monitoring, audit and sorting of waste at scale. Greyparrot have trials ongoing at 12 facilities with leading waste management companies, and are now raising a £10m Series A to scale their commercial product and become the category leader in waste analytics.
Seeing the success of these businesses can inspire the next generation of entrepreneurs to come up with their own solutions, offering the chance to marry profit with purpose. In turn many will go on to become investors themselves creating a virtuous cycle to help power the circular economy that must become the future of the planet if we are to avoid the worst ravages of climate change.
Out investment series continues with an exploration of litigation funding, with a guest post from Sophie Liu at Axia Funding:
AxiaFunder is an online litigation funding platform that connects investors with pre-vetted commercial litigation opportunities that we believe have the potential to generate attractive risk-adjusted returns. We are specifically targeting cases on the lower end of the legal market which, in our view, has been underserved by existing funders.
To date, AxiaFunder raised £2,387,843 for 14 commercial cases, of which six have already reached a positive resolution, generating a 12-94% return to our case investors each over a period of 2-15 months (with an average IRR of 48%). The remaining 8 cases are currently ongoing. There are no losses to date. *
What is Litigation Funding?
Litigation funding is where a third-party agrees to finance the legal costs of a dispute in return for a share of the proceeds that would be eventually recovered by the funded party. Litigation funding is typically provided on a non-recourse basis, meaning the funded party has no obligation to repay the funder in the event the case is unsuccessful.
What are the benefits of litigation funding as a new investment asset?
Litigation funding can potentially generate significant returns to case investors. It is common for investors of a winning case to expect to double, triple or quadruple their initial investment.* This asset also has zero correlation with the fluctuations in the broader economy and other assets. In addition, each case is almost entirely uncorrelated with each other. Thus, this offers further diversification.
What are the impacts of post Covid-19 economic environment on litigation investment?
In contrast to other investment opportunities (such as equities or real estate), litigation investment has zero correlation with the fluctuations in the broader economy and other assets. This makes it a compelling investment in current economic environment plagued by volatility and ongoing uncertainty over the end of the Covid-19 pandemic. In addition, litigation itself is expected to increase during an economic recession due to a sharp increase in a number of business insolvency related claims.
What are the social benefits of litigation funding?
Litigation funding helps to level the playing field by offering access to justice for those who need it the most. The litigation process is well known to be an expensive and often lengthy exercise with the final legal costs being uncertain. SMEs or individuals who enter contractual agreements with large companies often find themselves exposed to additional commercial risk due to the prohibitive cost of protecting their legal interests. Litigation funding offers claimants a means of pursuing a viable claim while preserving liquidity and minimising risk.
Can you give any examples of your funded cases?
• An unfair minority shareholder prejudice petition, where the defendant, the majority shareholder and a director of a company, allegedly diverted economic value from the claimant, a minority shareholder, who was instrumental in developing the business. This case has resolved successfully generating a 33.1% return to investors in 14 months.*
• An insurance claim by the builder, whose development was subjected to an arson attack, against both the insurance company for unreasonably seeking to avoid settling the client’s claim on its insurance policy, and the insurance broker for the non-disclosure of information on the basis of which the policy has been voided. This case has resolved successfully generating a 11.8% return to investors in 2 months.*
How do you select litigation cases?
Cases have to satisfy the following criteria:
• Legal merit: The legal merits of the claimant’s case must be strong. Typically, independent legal counsel will have endorsed the case with a high probability of success.
• ATE insurance policy: Each case must have an ATE insurance policy in place. It protects AxiaFunder’s case investors from adverse cost risk and helps to eliminate low quality cases.
• Case economics: The estimated damages normally have to be at least 5x the estimated costs of pursuing the case to trial.
• Enforceability: There must be clear evidence that the defendant has the financial resources to pay the damages and that any court judgement can be enforced.
• Experienced legal team: AxiaFunder will only fund cases for which the claimant’s legal team are clearly competent and have in-depth experience in the relevant area.
• Alignment of interest: The claimant and his legal team should share some downside risk in the event the case loses.
Other considerations include regulation, security for costs, pricing, and funding strategy to trial.
What are the risks of investing in litigation cases and how to mitigate them?
Litigation funding is typically provided on a non-recourse basis. As a result, an investor stands to lose all or most of their original investment if the case is unsuccessful. However, the downside risk of losing the entire investment can be significantly reduced by investing in a portfolio of litigation cases. This is illustrated in the article Single case versus portfolio litigation funding.
There is also a risk of having to pay the other side’s costs in the event the losing party themselves lacks the capital to cover these costs. The adverse cost risk can be mitigated by having After-The-Event (ATE) insurance policy in place. It provides protection against the liability to pay the other side’s costs in the event the case is unsuccessful.
How to invest with AxiaFunder?
Investors need to register on the AxiaFunder platform and complete the onboarding process which involves completing identity checks and passing the investor suitability test. Once these steps are complete, investors are ready to invest.
* Past performance is not indicative of future results & Capital at risk. Returns are not guaranteed
Whilst we’ve seen some huge successes in terms of fundraising in the last year, it’s important to remember the companies that have been successful, not only have worked very hard and persisted to get there, they often have clever hacks and systems to help.
As many of you are thinking about new year’s resolutions from a personal perspective, here are some recommendations for hacks, tips and processes that could improve your fundraising in 2022.
Look after yourself to look after your startup
Running a startup means there is always too much to do. Important investor meetings get diarised, exercise and eating healthily, not so much. But if you are not creating the best version of you, are you going to be presenting your start up optimally when you pitch to investors?
Make sure you are looking after your physical and mental health, it will likely pay off with you presenting yourself in the best manner possible, and in the quality of your pitch with investors.
Sleep well – keep your phone out of the bedroom
Now’s the time to start getting some actual quality downtime. If you check your emails in the middle of the night, it can quickly become a self enforcing habit that effects your sleep and alertness.
Lack of sleep has a number of negative effects, including impacting memory – important when recalling key metrics in investor meetings.
Keep your phone out of the bedroom and ideally have a pre-bed curfew to avoid blue light before bedtime. Leave it charging in another room over night to ensure that this doesn’t slip.
Try the Pomodoro Technique
Raising investment whilst balancing the everyday tasks of running a business is an arduous process, it’s easy to get bogged down in the never ending cycle of replying to emails and firefighting tech bugs and customer complaints.
Reclaim your time by planning and blocking out time using the Pomodoro Technique.
With the Pomodoro Technique, you create a list of the key tasks that you need to do.
Break the tasks into 25 minute segments (the optimal amount of time that people can generally concentrate effectively for).
Then fill your day with the appropriate amount of tasks. Set a timer for 25 minutes and get started on the task in hand, ignore the temptation to check your email, or anything else for that matter. When the timer ends, have a scheduled five minute break before jumping into the next segment.
It’s a unique way to stay focused, avoid distractions and obtain a sense of flow when working. Find out more about the Pomodoro Technique here.
Pimp Your Zoom Set Up
The large majority of investor meetings are still happening virtually, and it looks like that might be a lasting legacy of the pandemic, with all but a small minority of later stage meetings likely to take place over video calls.
With so many investor meetings, how can you make sure that you present yourself in the best possible way? Firstly using meeting scheduling software such as Calendly can be useful for sharing gaps in your availability, making it easier to coordinate meeting times with investors – it can also be integrated with Zoom or Google Meet to automatically schedule a video call.
Think about your backdrop – what kind of message do you think a cluttered backdrop sends to investors? You could use a virtual background, but sometimes using a real background will give investors some insight into what you like and help build rapport, whether it’s books you enjoy reading, pictures or some unique memorabilia.
Whilst you can make it work with pretty much any kit for video calls, having an external mic will make your voice feel warmer, like you are there in the room; an external webcam can give you a much clearer image and more of a contrast to get you stand out from the background; and a ring light can help you ensure that you maintain the focal point.
Do you find fundraising dispiriting? You’re not alone. Investors are typically very busy and often looking to invest in something that specifically meets their criteria, meaning that it’s not uncommon for messages to not receive a response.
On the Angel Investment Network platform, you can keep track the stage of investor conversations. You can also use software such as Pipedrive, ForceManager or Trello to categorise your investor conversations by stage.
It means that you can set yourself clear targets: i.e get X number of investor meetings this week, rather than fixating on the goals of raising investment, which can take longer, and you need to focus on getting more people through your funnel to get yourself in a position where they will convert.
CRMs have the advantage of letting you set yourself reminders to follow up with contacts, giving you analytics as to how long it is taking for contacts to get between stages, as well as adding in automation, i.e an email that it sent to investor contacts when they get to a specific point in your funnel.
We hope you have had a chance to restore over the festive period and have come back invigorated. If you are about to embark on a fundraising journey, now is the time to think of a few habits and hacks that could go on to pay dividends for you.
In this week’s #SixtySecondStartUp we catch up with Alpaca Coffee who are making ‘better coffee for you and the planet’:
A ceramic coffee mug is great for sipping hot drinks like tea or coffee, go to Spice Kitchen and Bar to take a look to the 11 Best Ceramic Coffee Mugs of 2022: Reviews & Top Picks.
What does Alpaca Coffee do?
Alpaca Coffee looks to bring better coffee for you and the planet. We are working towards being UK’s first fully sustainable coffee brand by promoting sustainability at every touchpoint:
Ethically-Sourced Specialty Coffee: Traceable sources to support family businesses that adhere to international standards on sustainability, better pricing, and quality
Zero Waste Roasting: Roasted via circular technology with biofuel instead of fossil fuel
100% Plastic Free & Compostable: 100% plastic-free, from our labels and our bags, all the way to our shipping boxes and compostable tape.
Offsetting Our Carbon Footprint: For every 10 bags of coffee sold, Alpaca Coffee will plant one tree in the Amazon Rainforest.
Why did you set up Alpaca Coffee?
I fell in love with specialty coffee during a trip to South America, but soon became aware of the negative environmental impact of the coffee industry. Due to this, we decided early on to become the new industry standard and to put sustainability at the core of what we do, making quality and sustainable coffee accessible for everyone.
How did you get your first customer?
We validated our idea with a Kickstarter campaign. The featured by Kickstarter and our >200% oversubscription jump started our initial customer base and we are fortunate that a lot of the customers from then have stayed with us since then. Despite the fact that we have grown since then, I will never forget the moment my best friends tried our coffee and their amazed look.
We knew we were onto something when?
Kickstarter was a start, but when we were featured by the UK Government as part of the SMB Climate Hub, among other publications such as Goodfind and Wherefrom, we knew we were onto something.
Our business model:
B2C with a focus on e-commerce. We are rapidly expanding into the retail and B2B space so hit us up for a chat ?
Our most effective marketing channel has been:
We are currently organic-heavy with our marketing, and so far has offseted >1,300,000 grams of carbon with >3000 bags of coffee sold. Social media has brought in great ROI, from word-of-mouth through user-generated content to collaborations with brands with similar philosophies. The team is working hard to further our presence by strengthening our branding and unboxing experiences. Stay tuned for our launch in December ?.
What we look for when recruiting:
We look for people who share our values in sustainability and understand our mission. Being a challenger brand, we want to recruit fearless, passionate people. Diverse backgrounds, perspectives, talents, and ideas are important to us and we are driven forward by this diversity.
The biggest mistake that I’ve made is:
Saying yes to too many things. I’ve learnt that it’s important to approach any part of our business with a clear goal and understanding of the return on investment. We now approach anything we do together as a team with a clear understanding of how it fits with our mission and vision, and how it drives the business forward.
We think that there’s growth in this sector because:
We are part of the “fourth wave of coffee”. As one of the most consumed drinks in the world, the quality of coffee as well as its impact on the environment and society, has become increasingly important to people around the world. As a specialty coffee company with sustainability at its core, we hope to become the new industry standard and push for better coffee for you and the planet.
We worked with AIN because:
AIN democratises angel investment and offers an unprecedented access to a supporting ecosystem and community of entrepreneurs and investors. This helps level the playing field and empowers entrepreneurs like us to grow.
Keen to hear more?
If you would like to see what other companies are up to on Angel Investment Network, or are interested in raising funding yourself, you can find your local network here.
Angel Investment Network, the world’s largest angel investment platform, surveyed the views of startups in the USA and UK to see how they have responded more than a year and a half after the pandemic first hit. This involved interviews with 1,205 startups in the USA and 667 in the UK. The key findings in the overall report we have published are:
1) Confidence returning Similar numbers in both territories are now positive about the next 12 months. In the USA 76% of respondents are now confident about the next year, with 72% confident in the UK. However more US startups are very optimistic about the future, 52% against 42% in the UK. This could of course be down to a naturally more upbeat mindset but the research also reveals some particular challenges in the UK – for example the impact of Brexit. Meanwhile 70% of respondents in the USA are confident about the country retaining its status as a ‘startup hub’, versus 65% in the UK.
2) Networking and bootstrapping have been ways of mitigating stalled investment 62% of US startups have seen growth negatively impacted with 59% in the UK negatively impacted. The research also reveals the similar approach to mitigating the impact of stalled investment. The top strategy adopted in both countries was focusing more on networking. Other strategies adopted included delaying launch plans, holding back on marketing and hiring and bootstrapping businesses as far as possible..
3) Raising investment is biggest challenge goingforward Raising investment remains the biggest challenge going forward and there is a firm belief in both countries that government has a key role in making the conditions more favourable through tax relief. The report also looked at the biggest bugbears for startup founders. Number one in both countries was investors demanding too much of a stake in the business. Time consuming due diligence was also a pressing concern as were very slow rejections.
As we look forward, startups in the US and UK can be the engine room of economic recovery in both countries – nurturing their growth is vital.
Derek Van Tonder shares the story of Euclideon Holographics and the key learnings from taking it through multiple rounds of funding, including the importance of benchmarking your company for investors and building meaningful relationships:
Tell us about what got you into start ups:
Euclideon Holographics was founded because we tried out traditional Virtual Reality helmets and we really didn’t like them – we hated the cord, the screens in front of our eyes were awful because we couldn’t see anything, and most importantly, they gave us motion sickness. So we decided to solve that problem by removing the screens in front of your eyes and moving them onto the walls around you to solve all these problems with VR, and Euclideon Holographics was born.
Why did you decide to raise investment?
Our products have been very successful and many customers even purchased them before they were properly finished (in beta) – we are using this success to prove to investors that their funds can make a good profit when we use investment money to set up warehouses and showrooms around the world. 95% of our customers have seen our holograms in person before committing to purchase, so it makes sense to put showrooms closer to our customers, and that requires investment capital. We are also using fundraising as a way to network with new partners. Many of our investors end up working with us in the business, for example by becoming a representative for our products in a far-flung region of the world that we normally would not easily be able to access. Since they are shareholders, they are passionate about our company and it works very well.
What is your top tip for anyone raising investment for the first time?
Be careful of scammers, using a service like Angel Investment Network greatly reduces the number of shady people you will have to deal with. Make sure that you understand your market very very well – investors don’t just want to know how much you could sell if only 1% of the market bought your products – they need better and more realistic estimates than that. Ideally, you should have proved that people want to buy your product/service before raising investment. Investors may love everything about your company and technology but could be scared away by the risk factor – you have to be absolutely transparent about risk with investors. If you have debts, disclose those. If you are at all cagey about disclosing financials, many investors will see this as a big red flag. The gold standard is to have an independent, 3rd party accountant sign off on a copy of your balance sheets before you raise capital. Every serious investor will ask for this, and rightly so. Investors also like you to be very clear about what’s in it for them – you should not give “pie in the sky” and overly optimistic projections and forecasts. Instead, try to find companies similar in size and scope to your own and use them as a benchmark for comparison purposes. For example, we use the company Tritium, they are literally in the same street as our HQ, with a similar number of employees, and they are also an Aussie technology manufacturer with their own factory. Because they are very similar we can show them to investors and talk about their great success story.
What attracted investors to your company?
Shareholders of Euclideon Holographics are interested in a long-term pre-IPO Intellectual Property play, they are investing with us because we have a lot of unique IP and patents, we have proven that customers want to buy our products, and we are offering new Hologram products not seen before that solve a lot of the problems with Virtual Reality. And we also support popular 3D simulation engines like Unreal and Unity. Manufacturing our products in Australia is also seen as a big advantage to our customers, particularly with regards to our military clients, Australia is seen as a “safe” and friendly country by military buyers. Australia is viewed favourably as a hi-tech and very stable Western democracy so that also helps us.
My biggest fundraising mistake was…
At first, only emailing investors and not touching base with them in other ways. You should reach out to them on LinkedIn, send text messages, phone them, everything possible – otherwise you will never know whether your important email got stuck in their spam/junk filter. The absolute gold standard is to have a Zoom call with every investor. Investors like to invest in people. You need to meet them somehow, ideally in person if you can.
Why did you choose to use Angel Investment Network?
AIN has consistently delivered quality investors to us over the years as we have expanded our operations. We now have an excellent shareholder list and many of our shareholders are actively involved in helping us distribute our products and find new opportunities and clients all over the world.
What has the funding enabled?
We use our funding for expansion and to fund R&D on new products. For example, our first foray onto AIN netted us $700,000 (AUD) of investment, which we subsequently used to refine and commercialise our Hologram Table product, which is now our 2nd most popular bestseller.
Keen to hear more?
Listen to Derek in the extra video for #BehindTheRaise:
If you would like to see what other companies are up to on Angel Investment Network, or are interested in raising funding yourself, you can find your local network here.
A majority of US startups (52%) are now ‘very optimistic’ about the next 12 months, despite 62% seeing business growth negatively impacted by the pandemic. This was a key finding of a new study of US startup sentiment 18 months after the start of the pandemic, by Angel Investment Network (AIN). The study of 1,205 US based startups found 76% expressed optimism overall with 19% quite optimistic and 52% very optimistic, versus just 24% who were pessimistic. It followed on from a similar survey we conducted of UK startup sentiment last month.
The results show the extent to which confidence has returned to early stage businesses Stateside, who are emerging strongly from the downturn. Of the 62% of respondents who revealed they had been negatively impacted by COVID, 37% had been ‘very negatively impacted’. Meanwhile 63% of those who had been planning to raise funds said they had delayed a raise as a result of COVID.
Top strategies to mitigate the impact of stalled fundraising were: Focusing more on networking, favoured by 46% of respondents, holding off launch plans (38%) and bootstrapping instead (32%), with a similar number delaying marketing.
Entrepreneurs were also asked what their biggest challenges were going forward. The top result given was raising investment (84%), hiring/recruiting the right talent (22%) and product development (22%). Ongoing COVID issues were a problem for 13% of those polled.
US startups also believe more Government action is needed to encourage investment and help startups flourish. 57% favour making tax relief more generous to boost angel investment, 32% making R&D tax relief more generous and 22% lowering corporation tax. 70% of respondents are confident the US will retain its place as a startup hub.
AIN has seen surging growth on its platform with connections between entrepreneurs and investors up by 23% since the start of the year. Meanwhile revenues have increased by 40% to a new record, indicating the huge pent up demand from startups now seeking funding.
According to Mike Lebus, founder of AIN: “It is encouraging to see how US startups have shown their mettle to ride out this really difficult period and emerge battle tested and with high levels of confidence. Many have been negatively impacted but have used their time wisely to build up their pipeline of contacts and bootstrap their businesses as far as they can go. RaIsing investment remains the biggest challenge going forward and as the world’s largest angel investment platform, we have been encouraged by seeing a record number of connections between investors and startups.”
How did you respond to the pandemic?
Focused more on networking: 46%
Held Off launch plans: 38%
Bootstrapped instead: 32%
Delayed marketing: 32%
Held off making hires: 27%
Had to let staff go: 20%
Relied on business loan: 19%
Pulled back from R&D: 12%
What could the Government do to help?
Make tax relief more generous to boost angel investment: 57%
Make R&D tax relief more generous: 32%
Lower corporation tax: 22%
Offer more clarity on COVID restrictions: 14%
Make it easier to provide VISAs for recruiting the right talent: 13%
Each month our team selects some of the companies raising on Angel Investment Network that really stand out, as part of our #StartUpBuzz feature.
This month’s picks includes: Smart Container Co – real time tracking for beer kegs, Bx Technologies, a platform facilitating carbon offsetting by connecting corporates with farms, and ARQ, an investment platform for personalised wealth management using AI. Smart Container Co
Enabling Transparency and a net-zero draught beer supply chain.
Smart Container Co turns traditional kegs into ‘smart’ containers, so that breweries, distributors and pubs can monitor the state of the beer inside, by combining a small waterproof IOT device connected to each keg (a KEGTRACKER), with their BEVEREDGE software.
It means that relevant parties can track the location, volume, temperature and motion for the liquid inside, reducing the risk of wasted stock, helping obtain more accurate shipping information, and gaining granular information about which product is being consumed where and when.
– UK patent pending – Chairman with 30 years experience including SAB Miller – Piloting technology with Brewdog.
Sam Louis, Head of Consultancy, Angel Investment Network shared why he is most impressed by Smart Container Co:
“We’ve known the Smart Container team for a while now and have been incredibly impressed with their progress. What we like is that they have a product that integrates smoothly into an exceptionally large existing market, giving significant opportunity for fast scale.
Since we first spoke with them, they’ve built strong relationships with some of the largest brewers and keg owners in the world, all of which have approached them cold. The timing is also very good – the pandemic has meant pubs and bars have become increasingly open to technology, something that was previously a hurdle, and many breweries have seen strong profits from retail sales.
All in all, it sets the company in a very strong position going forward and we’re excited to see where they go next”.
Helping farms prove carbon emissions and offsetting – connecting farm to corporates.
Farmers are incentivised to maximise crop yields, but are rarely accountable for their carbon footprint. However, there is enormous interest in carbon offsetting from corporates to help them meet their ESG goals.
Bx Technologies is the first two sided marketplace that connects corporations with farms and agriculture, reversing climate change through carbon offsetting and economic service investment.
Bx Technologies use a farm management SAAS system with a trading platform powered by blockchain to create a carbon credit investing platform, allowing farmers to see both their carbon position and the profitability of their orchard. At the same time, Bx offers Ecosystem Service Investments for corporates, securing a long term supply of carbon offset tokens.
– 1st SAAS client signed – paying $200k per year. – Expected to hit profitability by March ‘22 – Pipeline of over 12k hectares established
In terms of what excites him about Bx, Sam Louis explains:
“We were drawn to Bx Technologies for a number of reasons, the first of which was the boldness of their mission – remove 500m tons of carbon from the atmosphere per year. They’re operating in an exceptionally important and exciting vertical, with the opportunity to make an incredible impact on the planet as well creating massive growth potential.
They’ve tied these lofty aims to a strong underlying business model, with profitability within sight, and they aren’t expecting any altruism to make their business work. They’ve aligned the incentives of all their stakeholders, making it genuinely robust model. All in all, it’s the type of business we love – exciting, impactful and pragmatic.”
A wealth management app using AI personalised insights and comparisons.
ARQ is an investment platform that creates a personalised wealth management experience using AI and deep science.
The intelligent tools rank your investments performance using huge quantities of data and gives insights that can be used to improve your portfolio. ARQ are making tools that are only available to the super rich to more mainstream investors.
– A team with over 100+ years experience in financial services
– ARQ are offering white label services for wealth managers
– In house tech team behind leading fintech apps.
Xavier Ballester, Director of Angel Investment Network’s Brokerage Division shares why he is particularly impressed with ARQ.
“What I love about Arq is that I have this very issue: an Excel sheet with my various investments that doesn’t really give much insight after I have made my initial decision to invest. The beauty of this platform is that I can see my net worth and how my money is working for me and I imagine it will be a huge hit with financial advisors too.”
Richard Romanowski is co-founder and Executive Director of eleXsys Energy. eleXsys has developed a unique, international award-winning, enabling technology that will drive the transition of global energy grids to a clean energy future.
Tell us about eleXsys and how you came up with the idea? My co-founder, Dr. Bevan Holcombe, was a senior engineer at an Australian distribution utility with 30 years’ experience and was working on how to decarbonise the local suburban grid. I was a cleantech angel investor, looking for fabulous ideas.
The biggest issue to local decarbonisation is that the grid was designed as a one way grid. Bevan was trying to find a way to solve this problem, that is, the very limited grid hosting capacity of renewables due to the one-way grid design. He could not find a solution anywhere so in 2012 we decided to team up and started a company now called eleXsys Energy to solve this problem.
eleXsys in simple terms turns the one-way grid into a two-way grid in a cost effective manner enabling a huge increase in local renewables that the grid can host or accommodate in each suburb.
When we started eleXsys, Bevan and I had a vision that discovering a way to turn the one way grid into a two-way grid would be our contribution to saving the Great Barrier Reef by speeding up global distribution grid decarbonisation.
Over the last 9 years eleXsys developed a unique, international award-winning, enabling technology that will drive the transition of global energy grids to a clean energy future.
Why did you decide to raise investment? The co-founders, Bevan and Richard, are the initial high net worth investors. We invested over $7.5 M USD of our own money. Then some friends and close associates also invested almost another $4.0 M USD. We had developed an MVP (Minimal Viable Product) and a few field demonstrations and planned a slow organic and affordable commercialisation, starting in Australia. Then slowly going global as we knew Australia was a few years ahead of the rest of the world in terms of grid hosting capacity problems due to so much rooftop solar we have Down Under.
Then we won the World Energy Council (WEC) global start up award in 2019. When we won the award, the WEC Secretary General at the time (Christoph Frei), challenged us as follows, he said:
“This technology is game changing; you need to think 100 time bigger” …. that is, we need you to help speed up global decarbonisation and fast!
Since 2019 that is what we set out to do, and in that vein, we needed much more investment to speed up commercialisation and go global faster.
What is your top tip for anyone raising investment for the first time? It’s never easy, the 1st time or the 10th time. Be prepared to spend a large amount of time raising funds and listen and learn from every pitch. If they say no, ask why. Always be raising and expect to pitch to 50 or more before you hit any jackpot.
What attracted investors to your company? The IKEA flagship project in Australia which helped investors realise how eleXsys can radically speed up global decarbonisation in the local suburbs. The IKEA project represents a microgrid at up to 10 times bigger than what current Smart Invert technology and grid constraints would allow. So up to 10 x greater energy savings for the tenant, up to 10 x more rooftop rent for the landlord, plus up to a 10 x larger $ project for the asset owner (e.g. solar and battery power plant) to earn a secure, uncurtailed ROI over 20 years.
My biggest fundraising mistake was… Not listening at first to potential investors.
Why did you choose to use Angel Investment Network? A very supportive, understanding, and innovative group with a focus on ESG (Environmental – Social – Governance) investing. We are now raising our Pre IPO round.
What has the funding enabled? The main focus was fine tuning our global expansion plans through our planned licensing model. Licensing allows us to scale global quickly as opposed to originating, developing, and building microgrid projects ourselves, which would be a very slow and cumbersome process.
Through licensing our vision is that eleXsys becomes the “Intel Inside” of the global local renewables supply chain. That is, almost everyone is using eleXsys in their local suburban renewables projects to speed up global decarbonisation.
Did you know that filling every roof with solar could generate > 120% of Australia’s total electrical needs? Same should apply across the global sunbelt ≈ 75% of world’s population.
Cannot be done – local distribution grids will not integrate this much distributed energy due to grid physics limitations (curtailment) due to one-way grid design
Grid curtailment of DER (Distributed Energy Resources) begins to occur when the utility hits ≈ 15% of customers with DER, making projects non bankable .eleXsys cost effectively solves this fundamental problem one-way grid problem.
So far, we have one Master Licensee MOU signed and are negotiating with four more. Plus, established a few Alliance Partners licensees within Australia to be the sales channel and EPC of projects. Some of the Alliance Partners are global multinational using Australia as a test bed eleXsys licensee, with the intention to then become a global licensee.
Plus the funds are being used to enhance our manducating capability along with recruiting more staff to support the faster growth.
At Angel Investment Network, we strive to partner with pioneering organisations that support startups in ecosystems around the world, Silicon Roundabout have a mission to help get more young people into work at exciting startups, whilst helping unblocking some of the challenges in hiring that startups incur.
Franceso Perticariari, Managing Partner of Silicon Partner Ventures explains more in the guest blog post below:
At Silicon Roundabout we are working with the UK Government to help youngsters from all backgrounds and who are eager to break into the startup industry to get their feet off the ground and venture into their dream career.
As part of the programme, we help companies by offering a diverse pool of junior staff, aged 16-24, at no cost for 6 months, whilst helping these candidates gain work experience, so they can get their foot in the door in the tech world.
Our mission is to help increase diversity in tech by being the pathway for young people from all walks of life and varying backgrounds to find work with cool tech startups and develop the skills needed to build a career in today’s digital market.
We would all like to see an exciting, diverse tech industry! ?
Here are the jobs we currently train for:
– Junior Marketing Executive
– Junior Business Developer
– Office Executive
– Junior Graphic Design and Video Editing
– Junior Programmer
– Junior Bookkeeper
– Junior Project Manager
– Junior Data Analyst
Business qualifying will be able to apply for and hire candidates through our new, easy to use, platform and receive 6 months worth of wages for them! This includes NI & minimum employer contributions.
What happens at the end of the 6 month placement? Businesses have the opportunity (but not the obligation) to offer the junior employee a job at their company.
We already have 300+ employers on board and have successfully delivered the scheme to help 100+ youngsters with little to no experience and from all backgrounds, gender, and beliefs get training and join these employers. In fact, we’ve recently hired four junior members of staff ourselves who went through this very same process and training, which we designed as startup founders ourselves for startup founders. So far everyone is enthusiastic about the results and we really think this can have a profound impact for both companies and people.
Startups can sign up to Silicon Roundabout’s here .
Companies will need to pay these junior employees through their own payroll. We will then refund them using the Government funding after only 4-6 weeks from each payroll paid. No claiming needed. As long as the candidates are paid via the company’s payroll, We will automatically receive funds from the Government and transfer them over to them.
During the first month of our 6 month programme, candidates will be trained through our top digital bootcamps, which are also funded through the scheme.
Nicholas Phair shares why he thinks online voice messaging is the future in this month’s #SixtySecondStartUp.
What does your company do?
Online voice messaging. We help businesses build trust with their audiences using the most powerful tool they have… their voices. Our online voice recorders can be added to websites, workflows, social media and more, and used in online and offline campaigns to hear from customers, followers and fans and engage in two way asynchronous voice conversations.
Why did you set up this company?
To go back to basics. Voice has always communicated far more than typed text alone – emotion, emphasis, connection – and we saw an opportunity to bring the same ease and utility of voice messaging found in consumer apps such as WhatsApp and FB Messenger to help businesses better engage with their own customers.
How did you get your first customer?
By asking them to pay! It seems like an obvious point but it’s a lot harder than you think. Believing in your product means putting a price tag on it, and asking people to pay. Thankfully our first customer, a prominent podcaster in the US, saw the value immediately.
We knew we were onto something when?
… we received this early testimonial: “I’m just massively impressed with this entire thing. I’m kind of shocked that it doesn’t really exist to this level, and we can see this being extraordinarily helpful for us.”
Reading these words, after months of hard slogging in product and planning was golden. When our next 10 customers signed up organically and mirrored the above, we knew that if we kept going we’d succeed.
Our business model:
Freemium self-serve SaaS with consultative sales to the enterprise. In short: people sign up free on www.telbee.io to experience what voice messaging can do for them and their businesses. We limit the amount of voice messages that can be sent and received to 60 minutes per month and the service remains free (forever) until you decide you need more features, or want unlimited messaging minutes. And for larger businesses and enterprises we offer custom white labelled solutions and integrations specific to their needs.
Our most effective marketing channel has been:
Hands down it’s been word of mouth – which shouldn’t be a surprise since we’re all about speaking and listening!
What we look for when recruiting:
We ask why they want to work with us, and listen keenly to the answer. When the whys are strong enough the hows take care of themselves – or so the famous saying goes. We look for people that want to build something truly unique and grow personally and professionally with the business.
The biggest mistake that I’ve made is:
Putting the cart before the horse, and investing in sales and marketing capabilities before breaching that elusive threshold of comfort in finding product/market fit – and while that threshold keeps shifting, mistakes keep coming, but ultimately they are there to make us grow!
We think that there’s growth in this sector because:
Our voice is what makes us human – and in recent times the rise of automation, artificial intelligence, and lockdown-inducing pathogens, have highlighted the importance of building and cultivating real human relationships. We’ve seen an explosion in voice applications across the board, from podcasts, to voice assistance to new types of short and long form voice-based social media. Whilst we are still in the exploratory stage of this nascent sector, what is certain is that businesses everywhere are beginning to see the trust-building benefits of asynchronous voice communication for sales, support and retention. This is only the beginning – and there is so much to be excited about.
We worked with AIN because:
We worked with AIN because they gave us access to investors globally. As a UK company but with a product relevant worldwide, we knew that part of what we wanted from investors was to extend our market reach beyond our existing network. AIN allowed us to speak with investors from the US and Asia as well as the UK.
Keen to hear more?
If you would like to see what other companies are up to on Angel Investment Network, or are interested in raising funding yourself, you can find your local network here.
eleXsysEnergy has raised £640,000 through Angel Investment Network, the world’s largest online angel investment platform. eleXsys Energy has developed a unique, international award-winning, enabling technology that will drive the transition of global energy grids to a clean energy future. The eleXsys® technology enables large commercial and industrial rooftops to become grid-connected, solar power plants. eleXsys® is the critical enabling technology being installed to build the IKEA eleXsys Microgrid at IKEA Adelaide, which will become 100% powered by renewable generation by 2025.
The raise took four months and was part of a larger £5m funding raise, including a Series A round of £3.55m, with the funds allowing the business to continue its investment as it rapidly grows its global reach. eleXsys Energy’s innovative technology unlocks the full potential of electricity networks to host multiple times more clean, distributed energy without expensive network infrastructure upgrades. By providing services that enable a two-way flow of electricity on grids, the platform supports the most efficient, low-cost means of delivering clean distributed solar or wind energy.
The company originated in Australia but has now reorganised and is headquartered in London. This is eleXsys Energy’s first raise overseas and marks a significant step for the company. The company has over 270 customers including 11 industrial rooftops across schools and government, agricultural and commercial buildings. The raise will allow the business to continue to invest in its technology as it rapidly grows its global reach.
According to Richard Romanowski, co-founder and Executive Director, of eleXsys: “We are delighted to have completed a successful round of fundraising with Angel Investment Network. Our technology is critical for the transition to clean energy – one of the world’s most pressing challenges. Funding from investors across the world confirms the transglobal appetite for investment opportunities in new cleantech solutions, aiming to tackle global carbon reduction targets. We are a rapidly growing business and with the capital raised, we will be able to further drive our strategic plans for expansion and deliver on our goals for our new and existing investors.”
According to Sam Louis, Head of Consultancy at Angel Investment Network: “We are excited to be working with eleXsys Energy in this period of significant growth for the company. This raise ensured that eleXsys secured the backing of strategic and experienced investors as they expand their global reach and make their mark on international markets. Our passion-driven investors want to support businesses that solve real problems and there’s arguably few greater problems to solve than how to dramatically scale the move to clean energy.”