This was the average amount last year that hundreds of new businesses under two years old raised from private equity investors. They were given the money within 60 days of going online with angel investors and venture capitalists in exchange for shareholdings between 10% and 20%. It’s called “alternative finance” because it is outside the traditional banking loan system and it is now the mainstream source of fast low-cost growth capital. Last year over £20 billion was given to UK SME’s.

What type of start-ups and SME’s have successfully raised such funds? They are across all sectors. B2B such as manufacturers, engineers and professional service providers including technology designers, healthcare, training and consultancy. B2C companies included food and drink, online games, apps and retailers. They all have in common a desire to accelerate growth in high potential markets.

Fundraisers spend this windfall on recruiting top people, premises, equipment, marketing and IP protection. Investors often join the Board for value added advice, risk management, and introductions to major players in the supply chain. To win investor trust fundraisers undertake due diligence in advance to show investors they are responsible and sustainable businesses. This evidence includes proof of customer demand, intellectual property protections, environment and social impact and a strong management team.

Many start-ups combine angel money with online crowdfunding, grants and loans. Online webinars are available at no cost to better understand how this works. The University of Brighton Green Growth Platform and Clean Growth UK have been delivering these for several years fully funded at no cost to start-ups and SME’s.

For more information contact their strategic innovation advisor at Strategic Management Partners  Clive is also a member of UK Business Angels Association, a qualified IP advisor and ESG assessor for Responsible Business Standards.