Funding for Business
Early Stage Funding
Finding the first £0.3m of funding is usually quite difficult for new technology ventures as they are perceived by investors to be very high risk. Later on when the technology application is proven, the route to market has become established and there is a positive cash flow, it will become easier to attract funding. Science City York therefore concentrates on finding mechanisms to bridge this early stage funding gap so as to create more opportunities for technology concepts to be developed into a business and successfully brought to market.
In York and North Yorkshire there are now at least six useful stepping stones that can help someone with a really good technology concept to cross the funding gap:
1. Available pre-trading to prove the business concept – the Proof of Concept Fund. Awards up to £10,000
2. Available at commencement of trading – the Technology Growth Fund. Awards up to £25,000 with matched private investment plus a Small Firms Loan Guarantee Scheme (up to £100,000) to give a funding package up to £150,000. After two years trading the SFLGS may be increased to £250,000.
3. High Growth Start-Up Scheme (Business Link).
4. Access to private investors through established regional business angel networks such as the Yorkshire Association of Business Angels.
5. Access to the Viking Fund - a venture capital fund for equity rounds up to £250,000.
6. Access to Investors in Technology - a confidential database of high net-worth individuals in the York area seeking to invest in suitable technology ventures and offering business and technical expertise.
For University of York spin-outs there will also be access to other valuable sources of early-stage funds such as the White Rose Seed Corn Fund.
New SCY and York Professionals Scheme Offers Businesses Funding Towards Professional Services
Science City York in partnership with the York Professionals (formerly YPI) has launched an important new scheme to help fund access to professional services for early-stage businesses.
Emerging science, technology and creative businesses can apply for vouchers redeemable to the value of up to £1500 towards professional services provided by York Professionals members. Such services span business support, finance, IT, legal assistance, marketing, HR and property matters.
Please click here to find out more including how you can apply
Investment Readiness
Science City York will assist new ventures to identify the appropriate stepping stones to use and will help set priorities and an action plan for the business. Many new entrepreneurs will also find it helpful to join the investment readiness programme of Connect Yorkshire so that they can develop a suitable presentation and prepare themselves ready to attract investors. Connect Yorkshire also organise two major investment conferences a year for new ventures to pitch to venture capitalists, and it runs a Business Competition at Venturefest Yorkshire.
Subsequent Funding Rounds
There are many sources of venture capital funds in the region and elsewhere in the UK. Many of the larger legal firms have corporate lawyers who specialise in this area (http://www.thelawyer.com/lawyerdirectories.html), and the larger Accountancy firms usually have specialist corporate finance departments (http://www.icaewfirms.co.uk/). In York, most professionals are members of the York Professionals (http://www.theypi.co.uk).
Each of the nine regions of the UK has its own Regional Venture Capital Fund (RVCF) to invest in SMEs (Small/Medium Enterprises) in their region. In Yorkshire the RVCF is managed by YFM Venture Finance. Initial investments are limited to £250,000, but they can follow on after 6 months or more with a further £250,000.
For other sources of venture capital the British Venture Capital Association (BVCA) has a useful search facility to find investors for amounts from £10,000 to over £100m.
Science City York Assistance
Science City York Business Promoters have experience in advising technology companies through each of the steps described above, and are available to assist York and North Yorkshire ventures free of charge. If you think you could benefit from this service please contact one of the Business Promoters to discuss.
