Venture Capital Tools

Starting Up a Business in the UK

There has been a recent wave of websites and TV shows about people starting their own business and following that path from bright idea and individual entrepreneur to small business start-up and then potentially to multinational, depending on the product or service. But what kind of audience are they broadcasting to? Well, it turns out a lot of us Brits want to start up our own small business. According to Business Link, over 10 million of us would like to start up our own business at some point.

So the encouragement is there and let’s face it, a lot of us like to be the boss. However, the whole process is easier said than done. The people who took part in the survey were asked what the main obstacle to starting up their own company was. Many cited financial concerns, be it the current UK financial climate or perhaps their own overdrafts, mortgages and debts. How would they cope if they started, but couldn’t generate enough initial funding to keep it going? After all, they’ve got the idea, the business plan, the desire, and maybe even a few colleagues. But how do they find the right people?

Well, for most of us non-millionaires, the main thing we need to do is to generate capital for the business. Since start-up companies have no established brand name and no financial records, loans are pretty much impossible. This means the entrepreneur needs to look at other ways of finding potential investment. This can be done via venture capital funding, courtesy of private investors that can run the business with you (basing their funding terms on how your business performs in the early stages of investment) or with business angels, also known as angel investors, who are usually individuals or groups of people that provide the investment in exchange for partial ownership of your company.

Where can we find these people? Well, several websites have made that gap a lot smaller. Sites like the Angel Investment Network allow UK entrepreneurs to post ideas for start-up businesses, along with details such as which market sector (be it within the UK or globally), industry niche, and what sort of investment you are looking for. The network also allows angel investors (both in the UK and abroad) to browse through entrepreneurs’ proposals based on their own investment criteria and interests. Business partnerships and new start-up companies are evolving on a daily basis, and the Angel Investment Network database now has over 60,000 members.