An investing NED is a hybrid role between Non-Executive Director and Angel investor. Typically, you would invest an amount of between £25k and £50k in an early-stage startup business.   This investment is usually made under the HMRC SEIS or EIS schemes. This allows you to claim 50% or 30% (respectively) of your investment back against your tax bill. Thus, under SEIS, a £50k investment costs £25k after tax relief.   We collaborate with startups that are developing cutting-edge technology, software, or services, many of which deploy AI and originate from the UK’s leading universities   An investing NED is often looking for a startup in the field they previously worked in or in a sector they are passionate about.   In many respects, the aim here is to help startups benefit from your vast experience, knowledge, skills and connections, in a mentoring or coaching type role, whilst at the same time investing in an early-stage business where you hope to see good return in the future. Naturally, all investments carry risks, and startups are among the riskiest due to their early-stage nature. However, successful investments can yield significant returns, and your input can be instrumental in their success.   Those seeking paid NED roles will often be attracted to an investing NED role as part of a balanced portfolio – 2 or 3 paid NED roles plus one Investing role and maybe one charitable role. Investing NED roles add excitement and involvement – leveraging your network to make a startup business really fly is incredibly rewarding.   Balancing a startup team with established business professionals can make for a perfect structure, one that is attractive to future investors because of the experience it has. However, make sure you look for a good “fit” with the founders – do you share their vision, are they fully committed, can you clearly see where you can add value, and do you like them.   In the early stages, Investing NED roles are unpaid (cash is king in a startup). However, where specific objectives or goals are carved out for an investing NED, then reward mechanisms (usually around additional equity) can be put in place. Investing NED’s delivering added value, will often find themselves on a daily rate or retainer once the startup is in a position to afford this (usually after a bigger investment round or when they begin to generate revenue).   Each year, we place around 50 Investing NEDs with startup businesses through our partner, First Flight NEDs and Advisors. If you are interested, please email us at info@firstflightnonexec.com to schedule a call. You can also view our current live roles here .

Is your team credible and investable? With a successful MVP (Minimum Viable Product), a patent or two and LoL’s (Limits of Liability) from potential customers, it should be fairly easy to raise money from investors – you’d think so wouldn’t you? But the one element missing from the above, is your team – is it up to the task of turning your fledgling company into a major success – potential investors will look at your team with a hard-nosed and critical eye. What exactly will they be looking for in a team to take forward a business concept and turn it into a successful company? The answer is, it’s a blend – a blend of skills, experience, knowledge, values, culture and network, and, it’s very unlikely that the person or team that founded the business has this blend without additional external resource. Some examples of the good and the bad, starting with the bad: 4 young scientists found a company – no CEO candidate amongst them; age means little experience; none have founded a company before; age again means their network will be weak; little financial acumen…….not good. 1 young engineer creates a cool piece of new tech and turns it into a company – even worse than the 4 above, because he or she is on their own, carrying the weight of the world on their shoulders (risk of burnout; what happens to the company if they fall ill)……also not good. So what does good look like? 3 physicists found a company – having seen the path a startup should take on the Startup-Gurus website, and having understood the need to do a skills gap analysis, they do the following: 1. They recruit some investing NEDs who bring early-stage money to the company which gives them the match funding they need for their grant application. BUT crucially it also brings experience and network to their business in the sector they operate in. Typically this might be a CFO, a Sales and Marketing Person and perhaps a Manufacturing / Logistics and Supply Chain expert. 2. As things progress and leveraging the skills and network of their NED’s, they build out an advisory board filling more of the skills they’ve identified as missing from their team make-up. 3. With the Grant money in, the move to bringing in a full time CFO – someone with expertise in startups and fund raising and with a background from their industry. 4. At this stage, if an obvious CEO / COO candidate has not emerged from the 3 of them, then they might also choose to recruit one who can led the company commercially. Someone again from their industry sector who has been “round the block” a few times. If a candidate for CEO has emerged from the 3 then they should also find a mentor or coach for this person to help round out their developing skills and provide that person with a sounding board for difficult decisions. Using the above as a simple example – this company is now much more credible in front of potential Angel or VC investors, and the blend they’ve created will mean they are more investable. Summary Put bluntly the risk of youngsters making mistakes as the business develops can be substantially mitigated by bringing onboard NED’s and Advisors at an early stage, and then recruiting heavyweight CFO / COO / CEO employees to achieve that exponential growth and most importantly to attract the right calibre of investors. Contact us today if you need help or advice on how to build an investable and reliable team.

Your MVP (Minimum Viable Product) has attracted the attention you’d hoped for – clients want to buy once it’s ready; investors are lining up to put money in; the IP lawyer has confirmed “freedom to operate” and thinks you can gain a patent; the grant money is in and has got you to where you are, and the bugs in the software are nearly ironed out – so what comes next? Well, nothing happens without investors’ money, but as we’ve said above, they’re ready to jump in! To get them onboard, as part of your financial pack you will have created a “Use of Funds” statement. It says – if you give me £XXX,XXX then this is how I will spend it. It deals with headlines only – e.g. £500k will be spent: £250k on platform development, £200k on working capital and £50k on marketing. However, this statement to potential investors is driven by your “Funding Strategy” – how much do I need, when do I need it, and what will I use it for – this might cover your first 24 months of operation. Let’s assume you get investors to put in the £500k in the example above. What to Include in your Execution Plan You now need a plan – an Execution Plan: In detail – how will the money be spent, on what and when. This is a monthly plan and helps to manage cash flow, avoiding spend on unwarranted topics, and keeping you on track. This ties in closely to the cash flow forecast you have produced and are updating regularly. By matching cash flow with expected expenditure from your Execution Plan, you ensure you don’t run out of money. But more than this, the Execution plan directs your short-term activities, focusing the right people on the right projects with the right amount of funding at the right time. Work out what needs to be done, in what order, and by whom, and create something like a GANTT chart to provide oversight. This should map out the time frames for each task and where they are interlinked identify the requirement for “A” to be finished before “B” can be started. Use it to identify when recruitment should take place to ensure you remain on track (build enough time in for this). Use this document to drive your regular progress discussions, and to provide feedback to investors and stakeholders in general. Should you need help with your Execution Plan, get in touch with one of our Gurus today.

Customer trials are an excellent way to test your product or service and gain a better understanding of how your target audience will react to, and use your product/service before you go to market. If done right, your trial creates a win-win situation. Your customers get to try your product/service without financial risk, and you get concrete feedback on performance. Your trial customer should also see the financial / efficiency benefits you’re promising and this will encourage them to become an early paying client. However, before you start your product trials, there are a few things you need to have done first. Define your Target Audience The key here is to make sure you have a defined target audience before handing out your product samples or trials for feedback, otherwise you are just wasting time and money. Stuck on how to define a target audience for your product or service? Check out this post for help. Define the feedback objectives in advance To start, you’ll need to make sure that you know what type of feedback you are looking for from your trial. Define the key components that will make your product or service a success and hone in on those. For example, if you are trialling your new app, you might want to get feedback on its appearance, speed and usability. Write product documentation Before your trial customers test out your product, you should have “How-to-Use” documentation as well as an FAQ page with questions you expect might arise. Based on feedback, you can improve the FAQ section to reflect new questions that came up during the trial. Make sure your documentation is clear and jargon-free. Raise Awareness Then you’ll have to raise awareness about your trial, so that people actually know about it. This can be done in a number of ways, but will usually involve a targeted marketing campaign. Be sure to leverage your network – if you’ve created a product or service then you usually have a good idea of the sector or companies it’s targeting. If you personally don’t know people to contact in this sector or in this small group of companies, reach out to your network and see who does. Your Advisors or NED’s will often have the contacts you need and can help with introductions. If you can’t leverage personal connections, then depending on your product/service, spend some time working out how to contact likely trial candidates. If you’ve already got a database, then email those people about your new product. Or if you have a social media account, make a post about the trial. A popular way to build an email database is to create a landing page that briefly explains your product/service and gives people the opportunity to sign up using their email address for news and updates. If you don’t have either of those, then you can also simply pay to have your trial advertised in whichever media you think would be most effective to reach your audience. The main objective is to tell them how, where and why they should participate in the trial – sell the benefits and trial candidates will materialise. Offer incentives People might be willing to trial your product, but offering them incentives to leave feedback will increase the amount of data you will receive to help improve your product or service. Incentives can be a discount on signing up as a real customer after the trial or a financial reward if it doesn’t do what you’re promising it will. Or you can think about not charging for the trial “up-front” but saying something like “if this generates the savings we’re predicting e.g. 15%, then after the trial, you pay us 50% of those savings (or any variation of this benefit sharing concept) Be prepared Depending on the complexity of your product/service, you might need to have a customer support team put in place to answer any questions or resolve issues that trial customers encounter. This will incur costs that you will want to factor into your business plan (if you haven’t already done so). Remember that this is the first time your product is out in the real world, even if it is just a trial, so first impressions matter. Given the context, people may be more lenient if your product has a few issues, but how you respond to these issues is what really matters. Listen to the feedback This may seem obvious, but oftentimes your product will be used in a different way than you may have imagined. In these scenarios, it is important to adapt and listen to what customers have to say, and modify or even get rid of some features that you might be particularly attached to that end up not being as useful as you’d thought they would be. These steps are essential to conducting a successful customer trial. However, each trial will vary depending on which industry you are operating in and who you are targeting. For tailored advice to suit your needs, get in touch with one of our gurus today, we’d be happy to help!

As an entrepreneur you are by nature a risk taker and have made huge sacrifices to get your business to where it is today. This may not be your first business venture, and your experiences through your life have been a fantastic learning curve to enable you to be well prepared to make this a huge success. Being an entrepreneur can be all consuming, and many of our entrepreneurial clients tell us that it can be very hard to switch off. This has always been so much more than a job, but rather a way of life, and you desperately want your business to succeed. You have surrounded yourself with experts and advisors who have fantastic contact networks, and who are there to help you at every step of your journey. You have big plans, dreams, and aspirations for your business, which is so exciting, and it is fantastic when others share your passion for the business. Advice from financial planning experts can be invaluable Working alongside experts who can act as a professional sounding board can be invaluable, particularly if their focus is not simply to massage your ego but rather to provide a different perspective. Better still if they also share your passion for the business! In business it is sensible to recognise your own strengths, as well as the areas which come less naturally to you, to ensure that your business advisors and wider experts, complement your approach. In addition, speaking with financial planners that have extensive experience working alongside other entrepreneurs (who have embarked on a similar journey) can be hugely beneficial. Have you got your building blocks in place? When considering financial planning, traditional financial planning firms will want to engage you when you have achieved your dreams, and you have had the future business exit that you are working towards. At this point, you will have numerous financial planning firms and wider advisors who want to help you, and you will be unsure whether their intentions are the right ones. Commercially, at this point, you are a very attractive client and, traditionally in financial planning, client value is measured on assets under management. The majority of financial planning firms still operate this approach; however, the market is evolving, and some organisations are implementing fixed fee models. The reality is when you start a business, there are foundations that you should consider from a financial planning perspective. Whilst commercially financial planners do not engage entrepreneurs at this stage of their journey, this does not mean that there are building blocks that could and should be put in place. Whether you decide to put these foundations in place yourself, or with the use of a financial planner, is a personal choice, however the building blocks should be considered. Be prepared for the unexpected What would happen if you fell out with your fellow business partners and or advisors, or if one of your fellow directors was unable to work or worse still died? Would you be happy that their shareholding would pass to one of their family members? Would you be happy to have a new business partner with no experience in your field? Would you have the financial resources to pay off the family member in question? Having business protection in place which runs alongside your shareholder agreement is so important. It can provide the financial security and peace of mind that you are protected if the worst were to happen. Don’t forget those allowable expenses and pensions Have you considered pension planning? As a director, contributions can be treated as an allowable expense and will reduce your corporation tax bill. Pensions can also enable you to accumulate your own personal wealth in an environment which is free of tax. Pensions cannot be accessed until the age of 55. However, when it comes to taking your benefits you have so much more freedom and control than in years gone by and can take income when you need it. It is not commonly known, but certain pensions can provide future liquidity and there is the potential, to provide loans and or to borrow monies. Whilst there are certain rules that govern this, within Small Self Administrated Schemes (SSAS’s) this can in many ways, be considered as an additional tax efficient banking facility. This again can be hugely beneficial, perhaps not now and whilst you may not be looking to pay into a pension straight away, there could be historic pensions which you may have accumulated which could potentially be used for this purpose. Protecting your investment and personal wealth Do you invest money, and have you considered your own personal balance sheet? As entrepreneurs you will naturally be very aware of your business balance sheet, but what about your personal balance sheet? What would happen if you did not achieve the future business exit you were hoping for? Are you investing everything on black? It is important to be realistic and to consider all outcomes. If you invest even a small amount, this can help to build you your own personal wealth which will mean that you and your family are in a fantastic position, whether the outcome is red or black. There are fantastic investment options available, and a good financial planner will work alongside an entrepreneur’s accountant to consider areas like profit extraction, and to help utilise all the investment and taxation options available. Bespoke financial plans give you solid foundations Depending on where you are within your journey as an entrepreneur, you may not need a full bespoke financial plan, but it is essential to put the foundations in place. Implementing a “light touch” financial plan, can ensure that you have the right initial building blocks in position, and then as your business grows and expands, this plan can evolve and be readjusted to ensure that it reflects your changing requirements. These financial plans can be linked to “financial products” which is the traditional approach, or set up on a fixed fee basis, which can ensure that the plan is aligned to your future aspirations as an entrepreneur. Know all your options If you speak with a financial planner at this stage it may be simply to gather knowledge. Whether it makes sense to formally engage them ultimately comes down to the perceived value, However, being aware of the different options available to you will help you to plan more effectively for the future. At Jarrovian, we offer a full range of services to meet the requirements of entrepreneurs. You can find out more at our website www.jarrovian.co.uk I hope you have found this article informative. If so, please share it with friends and colleagues. If you have any comments for me send them to tony@jarrovian.co.uk

If all of this is too overwhelming or not your speciality and you’d like us to take care of it - just contact us and we’ll coordinate things for you. Below you'll find a list of resources to help you with your startup. From CRMs to legal help, we've got a bunch of links that will definitely come in handy throughout your startup's journey to success: Advertising: Linkedin Ads Facebook Ads (also used for Instagram advertising) Google Ads Analytics: Google Analytics KISSmetrics Mixpanel Chartbeat Clicky GoSquared Mint CRMs: Compare 3 top CRMs Email Marketing: Mail Chimp Constant Contact Emma Mad Mimi Event Management: Eventbrite Meetup BigTent Startup Jobs AngelList InternMatch HireArt Y Combinator Jobs SEO: SEMrush Google Keywords Moz Cloud Storage: Dropbox Drive Pitching: Prezi Slideshare YouTube Haiku Deck GoAnimate Project Management: Asana Basecamp Trello Podio Redmine PML Surveys: SurveyMonkey Typeform Qualtrics Survey.io Wufoo Google Forms Startup Assets: Business cards: Canva MOO Cards Vistaprint Design: Adobe Kuler Color Wheel Premium Pixels Macromates Sublime Text WordMark The Noun Project ColourLovers Domain Registration: Panabee GoDaddy .CO register iWantMyName 1 & 1 Nework Solutions Namecheap Create a website: SquareSpace Wix Tackk Wordpress Legal: Corporate Structures LegalZoom Y Combinator Term Sheets Docracy Freshbooks Foundr Equity Split Calculator If there's anything else we can help you with, message us on LinkedIn or send us an email at info@startup-gurus.com.

We’ve done our best to cover the most we could in our startup guide, but here are a few more questions you might have. If there are any we’ve missed, email us at info@startup-gurus.com or send us a message on LinkedIn and we’ll answer your questions as soon as we can! How should equity be split between co-founders? Splitting the company equally between co-founders might seem like the most logical choice, but is it a smart business decision? Maybe, maybe not. You need to decide early on who will be in charge of what, and based on the responsibilities of each co-founder, split the equity accordingly. If someone has more responsibilities than the others, they should receive a larger share of the equity. If you're struggling with this, you can check out an Equity Split Calculator in our Resources. How should I value my company when approaching investors? First, don’t pluck a number out of thin air. Depending on what stage your startup is at, you will have different metrics that you can use to justify your valuation. If you’re pre-sales for example, base your value on the physical assets your company owns, and realistic sales projections that are grounded in market research (market size, market wealth, etc.). Use this calculator to help value your company https://www.venionaire.com/startup-valuation-calculator/. What does the CEO do? The Chief Executive Officer leads a startup on both operational and strategic levels. They set the overall goals for the company and are responsible for evaluating progress and reaching said goals. A CEO also has to liaise with external investors, the board of directs and company management. If a startup was a ship, the CEO would be its captain. Remember the Shareholders appoint the Board of Directors, the Board of Directors appoint the Executive (including the CEO) - this is the reporting structure. It’s blurred in the early days when the Founder(s) may be the majority shareholder, only director(s) and fill the senior executive roles. But as further funding comes in this will begin to change. Am I qualified to be an entrepreneur? The qualities of a successful entrepreneur are the following: Hard-working and passionate: Startups require a huge amount of work, so you need to be willing to put in the time, and inspire your team to do the same. Able to assess and manage risk. Be self-confident, but know your limits - if someone else could do the task better than you, they should be in charge of doing it. Have an eye for talented, passionate individuals. A startup is nothing without a skilled and enthusiastic team. Adapt to change, and always seek improvement. Proactive, not reactive. Focussed. Where to find funding for my startup? We covered this in our Funding your Startup chapter, but a good place to start is friends or family, business loans or equity investors. Grants represent a good way to bring money in without giving away equity so have these at the front of your mind - Startup-Gurus retain professional grant writers who would be happy to advise on whether you qualify for grants and how to go about getting them. If you live in or near a city, check for any startup-related events, there’s guaranteed to be a few and they’re a great way to start building your network. How do I know when to fully commit to my startup? A lot of the time, startups are a started as a part-time project, but if you think it has potential, when is the right time to quit your day job and invest all your time into your startup? First off, you need to be absolutely sure that you have an idea that solves a problem that people would pay to solve (by buying your product). Then you need to be certain that you are committed to putting in the time and effort required to make it work. Once that’s sorted, you need to figure out if you’re in a financial situation that allows you to forgo a salary for a while until your startup can afford to pay you. If you tick all those boxes, then you’re in a pretty good place to fully commit to your startup. How much should I pay myself? As little as possible. Money will be tight so you’ll need to direct resources to where they will make the most difference. That being said, do pay yourself enough to get by and remain committed to the business. Where do I find a co-founder? Many co-founders are childhood friends, went to college together or are work colleagues. But if this doesn’t apply to you and you’re looking for a partner (or two) to turn your idea into a startup with, then the best thing to do is get your idea out there. Chat to people, and chances are you’ll find someone who loves your idea and want to go into business with you. How do I protect my idea? Patents, trademarks, registered designs and copyrights can be filed for if you want to legally protect your idea from being stolen. This is definitely something you should consider if you have something proprietary. Patents and registered designs must be applied for before you go public with your solution, otherwise it will not be considered 'new' at the time of applying. This does not apply to trademarks and copyrights. Startup-Gurus retain a team of IP lawyers who offer a free consultation to determine whether you’ve got IP that can be registered and if so how - just contact us to set that up. What is an incubator/ accelerator and should I consider one for my startup? Incubators are organisations that are designed to speed up the growth (and success) of startups. They’re often a good path to capital from angel investors, state governments, economic-development coalitions and other investors. The downside is that if you don’t choose the right incubator, you might end up getting a lot of bad advice, interference in management decisions and wasting money. It’s up to you to decide whether the mentorship is worth it for your startup. Here is a list of some of London’s incubators. Reach out to Startup-Gurus if you want help and advice regarding Incubators / Accelerator programmes, very often the terms can be quite onerous and we can help sort the wheat from the chaff

It goes without saying that you need funding to get your startup off the ground. This can come in a few different forms, such as Bootstrapping, Grants, Debt and Equity. At the beginning of your venture, the most likely way you’ll raise funds is through bootstrapping. Bootstrapping It would be nice if investors believed in your startup as much as you do, but that usually isn’t the case. That’s why you’ll have to raise money from your own pocket, through friends and family or through crowdsourcing to get your startup up and running. This is usually referred to as a ‘seed investment'. The money you raise will be used to meet the basic costs of starting a business, such as incorporating your startup, a website domain, office supplies, etc.. The longer you can sustain yourself using nothing but your bootstrapped money, the better. Usually this means you will be putting in a lot of extra hours. That being said, make sure you’re not losing your competitive edge by relying too much on your seed investment particularly when it's starting to wear thin. If your bootstrapping efforts don’t yield as much money as you’d hoped, remember that your time is free to you. So you should do the things that lead up to launching your company. These will include market research, crafting a business plan, or chatting to potential customers about your idea etc.. As an entrepreneur, you should definitely have your own money invested in the company. Any investors you approach will ask themselves why they should invest in your startup if you, the founder, haven’t put any money into it. Once you get to the point where you need more money to keep the business going, or to take it to the next level, you’ve got three options: debt, equity or grants. Lenders are usually more indiscriminate about what they invest in, as long as you can offer them some security and they get their money. And security is the key here - Lenders, especially in early stage businesses will only Lend IF there is something it can be secured against or a guarantor exists. Debt Debt is a scary term, and most of us try to avoid being in debt as much as possible. But if you’re in the business of running a business, you might have to ask for a loan at one point or another. Generally speaking, it is easier to find a lender than it is to find an equity investor - and also easier to get an investment from. Lenders are usually more indiscriminate about what they invest in, as long as you can offer them some security and they get their money. Debt is a good solution if you have upfront costs that you need to pay in order to get your business going, like purchasing an expensive piece of equipment for example. However, if you’re taking out loans for payroll or rent purposes, you might be digging yourself into a hole you can’t get out of. Unless you know that the money you’re borrowing can be paid back, don’t put yourself in debt. You don’t always have to go to a bank or fishy loan shark to secure a loan either, there are plenty of government-funded initiatives that will lend you money with decent interest rates, but you might have to work a bit harder to secure such loans. So make sure you have all the assets and information you need to blow them away with your startup. Equity Unlike lenders, who expect their money back (with interest) when they lend you money, equity investors will want a share of your company in exchange for their money. Equity investments are most valuable to business that operate in high-risk market, or who need a significant amount of time before they can generate a significant amount of income. That’s because these investments don’t need to be paid back immediately in instalments. Another advantage is that equity investors will usually have a well-connected network that you can tap into, for both additional funding and routes to market. The downside is that you have to give up a portion of your business in return, and depending on how much you give away, you might lose the ability to make executive decisions for your startup if you don’t own enough equity anymore. Furthermore, it is extremely rare to recover equity once you have sold it. That is why it is very important that you strike a deal for the right price and with the right investor. Speaking of early stage investors, there are two kinds: Angel Investors and Venture Capitalists. What’s the difference? Angel investors invest their own money, whereas Venture capitalists invest other people's money. There are pros and cons for whichever type of investor you decide to go with. The best choice depends on your startup - what sector you operate in, whether your end goal is an IPO or to build a lifetime business, etc.. Pros & Cons of Angel Investors Angel investors have access to substantial capital, which they invest in business ideas they believe will succeed. Coming to an agreement with such an investor can thus offer benefits that extend beyond simple business financing. A smart angel considers their investment opportunities carefully. If one chooses to fund your business, it’s a good sign they feel strongly about its potential. That means you have someone on your side who may be as passionate about this venture as you are. This often makes it easier to forge connections in your chosen industry. After all, angel investors have a financial interest in your success. They frequently choose to invest in businesses they can actively help grow. If an angel comes across an entrepreneur looking to start a business in a sector they’re familiar with, they’ll be more comfortable making an investment, knowing they can introduce said entrepreneur to other important industry figures. However, you have to remember that an angel investor is still an individual person. The amount of money they can justifiably invest is somewhat limited compared to other options. Pros & Cons of Venture Capitalists Venture capitalist firms aren’t individuals. They’re entities that consist of numerous professional investors, board members, executives, business management specialists, and more. Additionally, the money they invest comes from a wide range of sources. This means they have greater capital to invest in your business than angel investors do. That’s the main benefit they offer. On top of that, because they specialise in helping businesses succeed, venture capitalists can offer valuable resources and guidance. That doesn’t mean there aren’t downsides to working with VCs. Again, angels choose to invest in your business because they are passionate about it. As a result, they are often more willing to remain loyal if they don’t see immediate returns. VCs, on the other hand, make investments with the primary goal of making a profit for their firm. This means they are more aggressive about demanding results. Because of this, VCs often take on enough equity in companies to play major roles in their growth. If their ownership share exceeds 50%, VCs can even get rid of the company’s founders. It helps to carefully determine how much money you need to raise to avoid giving away too much of your company in order to justify larger investments. These are all factors you need to consider when deciding where to seek investments. Do you want the benefit of major funding, in exchange for less control over your business, or can you accept less capital in exchange for more freedom? Answering these questions honestly is key to making the right decision for your business goals. Grant Funding A great source of early stage finance, you apply in a set format a bit like a competition. The process is similar to that of Accelerator or Incubator programmes - you are in competition with other startups to “win” a share of a pot of money. It always makes sense to use a professional grant writer, ideally one with a small up front fee and a contingent amount based on success (makes them linked to a successful application). Make sure they have experience in your sector and have written similar applications before - find out what their success rate is and ask for references. A grant often comes on a “matched funding” basis that will requires you to raise a certain (matching) amount - typically 30% but it can be as high as 50%. Startup Gurus have a unique way to help you raise this amount - ask for details £1 for every £1 the grant provides. R&D Tax Credits R&D tax credits are a useful source of funding for businesses that have been trading for more than one year and have spent a significant amount on research and development. A professional company will work on this for you contingently (ours does, and if not, don’t use them), and you get cash back from the Government. Introducing… the Introducer The market for fund raising has an intermediary called an introducer - they will find finance for you in many different categories, help with structure, advice on presentation documents, support during presentations, vet the investors and so on, and they do so for a percentage of the investment raised. For early stage businesses looking for between (say) £500k and 2.5m you should consider between 15% and 5% to be paid in commission - higher for a lower amount usually on a sliding scale. This can be negotiated, and sometimes the introducer will take shares as part payment. You will need to sign an agreement with the Introducer ahead of them working on your behalf. Check their history of introducing investors and seek to speak with other companies they have worked with. The Steps on the Funding Road: The type of investors in the order you will need them (typically): Friends and Family; Grant Writers - always with a professional Grant Writer Angel investors (early stage, wealthy individuals who’ve previously been involved in startups themselves - investment range is usually £10,000 to £500,000) who very often work together resulting in several small Angel investors putting in a meaningful amount. Venture Capitalists (from about £250k up to £5 million). Make sure you understand their terms of investment, so triple check everything. You will probably need decent legal advice at this point. Institutional - anything from Banks to Funds - usually over £2.5 million. You definitely need to do the proper due diligence in this case, so an excellent document pack is required. This is s longer process, where a decision committee is often involved. There is a chance that you might find a long-term institutional financing partner. Listing on a recognised market - floating the company, often the point where early investors make their money (and profit). End Note Funding for your startup can come in different shapes and sizes. At each stage of your business, it is essential to evaluate every option at your disposal and decide what would be best for your startup and its future. This can be a tough choice to make, especially when you have to focus on a million other things to keep your startup going. But do NOT rush into taking money just because it’s there and you’re desperate. If you need help with securing funding, where to look for investments, or weighing up what type of investment would be best for you, we’d love to help you out. You can reach out to us at info@startup-gurus.com or on LinkedIn.

Marketing your startup effectively is often the difference between success and failure. With the vast amount of companies competing for the same market, combined with the abundance of marketing messages, your marketing efforts need to stand out from the crowd. To do so, you’ll need to have a defined target audience - a generic ‘my product can be used by anyone’ approach to segmentation will lead to wasted money and failure. Defining your target audience: If you’ve got a business plan for your startup, then you’ve already done this part (see what we meant when we said that business plans would save you hassle down the line?). You need detailed knowledge of your target market, to know when and where will be the best time to promote your startup. This will also inform you about the wealth and size of your target market. Is it big enough for you to have sufficient customers? And of the people it appeals to, will enough of those people be willing to pay for your product/service? Defining your target audience properly is vital, because it will influence your value proposition, which is a key way to make your message stand out. Your value proposition Your value proposition is the core message you want to get across to your target audience. It shouldn’t be any longer than a sentence, and will guide your marketing efforts ensuring you have a consistent campaign across all your chosen channels. It doesn’t need to sound particularly good or roll off the tongue, it’s not a slogan. But your slogan should be derived from your value proposition. For example, Apple’s value proposition for its Macbook Air could be: A lightweight portable computer with more advanced technology than its competitors. And here is their campaign: Do you see how the tagline in the image promotes the value proposition’s message, but in a more catchy way? How to know if your marketing efforts are successful Once you’ve got a clear target audience and a defined value proposition, it’s time to start marketing! Depending on your audience, you might want to focus all your marketing efforts into social media campaigns on Snapchat and Tik Tok, or rely solely on email campaigns - or a bit of both. No matter what you do though, make sure that you are evaluating the campaigns’ performance based on KPIs. KPIs are Key Performance Indicators, and are the goals you plan to achieve through your marketing campaigns. But that means more than saying you want to get 250 likes on your promoted Instagram post. If your goal is exposure, that might be a decent start, but you’ll need to focus on more than vanity metrics such as likes or followers. You might be amassing likes and followers by the boatload, but if you’re noticing that no one from Instagram is buying your product or even going to your website, then you might be wasting your time. However, if your email campaign seems to be funnelling quite a few people to your website and a couple of them even purchased your product, then perhaps you should scrap your Instagram campaign and focus more heavily on emails. That is why you need to closely monitor your campaigns, so that you can see which ones are working and which ones are a waste of money. Monitoring tools are usually included with the platform that you’re advertising on, but you can also use some independent marketing analysis tools if you want an overview of all your campaigns in one place or if the metrics you want to track aren’t included in the platform’s own analytics. You’ll also want to check out your website’s analytics with Google Analytics, which will allow you to see how people got to your website (was it your Instagram ad? Did they come from a Google search?) and how they behave once they’re on your website. This will show you what pages they visit, what the last page they visited was before they left your site, etc.. If you’re seeing an 80% exit rate (commonly referred to as bounce rate) on your home page, maybe you need to think about redesigning it so that people are more inclined to stay on it and browse through more pages on your website - ideally purchasing something as a consequence. End Note Marketing can be very confusing, and getting it right certainly isn’t easy - even if you know what you’re doing. The key is to know who you’re talking to (your target audience), what you’re saying (your value proposition), what your end goal(s) is/are (KPIs) and whether it’s working or not (using analytics). That way, even if it’s not working, you’ll know where it’s going wrong and what needs to be changed. That being said, if you need more help with marketing your startup (or anything else), our team of Startup Gurus would be delighted to see what we can do for you! Message us on LinkedIn, or send us an email at info@startup-gurus.com to get in touch.

Why do you need a business plan? A business plan can be thought of as a roadmap that guides you towards the right decisions. The aim of a business plan is to lay out a strategy for your business and it will spawn 4 essential documents without which it will be hard to make progress: The Business Plan itself; A full financial forecast for a minimum of 3 years but ideally 4 or 5 (the highlights of which appear in the Business plan and Executive Summary); An Executive Summary (the first 5 to 10 pages of your Business plan which can be sent separately); Pitch deck which is in essence a PowerPoint version of the Executive Summary (but lots of images and bullet points and few words) and finally a one or two page teaser - a very short version of the Exec Sum. Examples of all of these and help in pulling them together - go to Startup-Gurus. Startups with business plans also tend to perform better according to research. It is a crucial step for entrepreneurs, as it will help check the viability of your startup before you invest time and money into it. It will also help keep you on the right track and focussed on delivering key objectives for your business. Not only does it help you out, but it is also the key document that investors will want to read carefully, so if you don’t have one, don’t expect much success when pitching to investors. It is also important to note that as your startup evolves, so should your business plan. Now that you know why you can’t skip this step, let’s have a look at what you need to include. What goes in a business plan? Usually, a business plan always has the following elements: Executive summary Company description Market research Competitor Analysis Description of products and/or services Management, operational structure and current ownership Marketing and sales strategy Financial Pack Let’s get into what goes in each section. Executive summary Writing a good executive summary is crucial for your business plan, as it’s the first thing that people will read. However, it is generally written once all the other sections have been approved by the rest of your team. So write in a clear and concise manner, summarising everything that you've detailed in the plan. Keep it short. This is a summary, and its purpose is to excite investors into reading the rest of the plan, so 5-10 pages would be enough. The length of an executive summary varies from business plan to business plan, but as a rule of thumb, it should be 20% or less of the entire document. Company description Introduce your company, your team, and why it sets itself apart from the rest. Lay out some key goals that you want your startup to achieve - bring out you Vision and Mission Statement. Keep this section fairly short, no more than 3-4 paragraphs. Market research This might not be the most exciting task, but it is extremely important. You’ll need to determine what your target market is and how big it is. To do so, segment your audience based on geographic, demographic, psychographic and behavioural criteria. Start with the broader criteria and then narrow it down. Where does your target audience live? How large is the group? Is it growing or shrinking? How old are they? How much do they earn? What are their attitudes? What sort of behaviour patterns do they follow? Example of a target audience: Women and men (demographic) Between the ages of 18-27 (demographic) Living in London (geographic) Earning between £45k and £60k per annum (demographic) Who believe that climate change is a pressing issue (psychographic) And who never buy products that have non-recyclable packaging (behavioural). Make sure you show how you arrived at this target market, is it based on research? If it’s not then you should probably just start over. You need to be able to justify why this is the audience you’ve targeted. Another component of market research is competitive analysis. Who are your competitors? If you can’t find any then you need to look a little harder. Once you’ve gathered information on the competition, explain how you are different - and hopefully better - than other players in your market. Are you going to be selling your product for less? Will you be using more premium materials than your competitors? Is your aftercare service superior to others? Competitor Analysis Sometimes seen as a component of market research but in itself, absolutely crucial and often poorly executed is competitor analysis. Who are your competitors? If you can’t find any then you need to look a little harder. Once you’ve gathered information on the competition, explain how you are different - and hopefully better - than other players in your market. Are you going to be selling your product for less? Will you be using more premium materials than your competitors? Is your aftercare service superior to others? Describe your idea in detail, how it’s made, why it will be made that way, what its key features are and why people will want to use it. Make sure you’re clear in your description and not using any jargon that might be confusing to non-experts. Explore the concept of making in-house vs using third parties and evaluate supply chain. To run a successful startup, you need to have a clear structure explaining the way you operate. Who is in charge of who, who has the power to make executive decisions, etc.. Startups are generally run by young people. This means huge enthusiasm, massive energy, exciting ideas, BUT lacking experience. This is a concern to investors - fix this by having a good Advisory Board and Non Executive Directors. Look for people with sector and industry experience and crucially networks that can help your business - Startup-Gurus can provide exactly the right people and very often they will invest too! Description of product/service Describe your idea in detail, how it’s made, why it will be made that way, what its key features are and why people will want to use it. Make sure you’re clear in your description and not using any jargon that might be confusing to non-experts. Management and operational structure To run a successful startup, you need to have a clear hierarchical structure of the way you operate. Who is in charge of who, who has the power to make executive decisions, etc.. This will let investors know how the company will operate regarding investors and board members. It will also eliminate any sort of confusion in terms of who does what or who reports to who, helping your startup run as smoothly and efficiently as possible. Marketing and sales strategy If no one hears about your amazing product/service, no one’s going to buy it. You need to have a marketing strategy to deliver your brand/product/message out to your target audience, and you can’t just say “I’ll whack up some billboards along the highway”. You need to determine what your best marketing strategy is going to be in terms of ROI (return on investment) of your budget. A basic marketing strategy will generally include a website, active social media channels, email subscriber lists, customer retention and/or loyalty programs. This varies from startup to startup, so it’s all about finding the right combination for you and your target audience. As with any plan, you’ll want to set some marketing objectives that you intend to achieve. Your objectives should be SMART - Specific, Measurable, Attainable, Relevant and Timely. In terms of your sales strategy, you’ll also need to think about the most effective and profitable way to sell to your customers. You might be thinking about selling straight through your website, through retailers, or through a combination of both. Financial Pack You’ll need to calculate how much it will cost you to launch and run your startup, otherwise how are you even going to know how much money you need to ask investors for? You need to include a lot in this section which can take a lot of time and skill to put together, so it's a good idea to seek professional help. Organising a budget will reduce your risk of failing due to lack of funds. Think of all the costs you might incur when setting up your startup. Things like: cost of equipment property (buying or leasing) legal fees payroll insurance inventory marketing R&D costs production costs It can be hard to predict exactly how much everything is going to cost, but you can always make a good estimate with thorough research. If you’re still unsure, estimate on the higher end to play it safe. It’s better if something ends up costing less than you initially planned for. If your startup isn’t fully operational, it’s unlikely that you’ll have any cash flow reports or balance sheets. So you’ll have to make projections based on the size of your target market, what percentage of that market you’ll be able to secure combined with other factors (i.e. if your product is seasonal, you’ll have to take that into account in your projections). Most business plan readers will want to see a Breakeven Analysis, which will show that you have a solid understanding of your startup's financial situation and also clearly lays out when your startup can be expected to turn a profit. End note Writing a business plan might seem demanding and rather overwhelming, but it will save you a lot of trouble down the road and help you get investments, so you can’t afford to skip it. Make sure you lay everything out clearly, concisely and in a logical manner. Check for spelling mistakes and any use of confusing jargon. Once you’ve done that and made sure you’ve included everything you need, you’re done! If you are struggling with your business plan, reach out to us on LinkedIn or via email at info@startup-gurus.com, we’d be more than happy to help. See you in the next chapter!

Sell your vision To attract investors and customers, you have to be able to sell your vision effectively - which is a lot easier said than done. You need to get people excited about your startup’s product, which means you must have your pitch prepared and ready to go at any moment’s notice. You’ll also need a pitch deck - this takes the highlights of your business plan and makes a presentation document that will be no more than 20 slides long. It can be printed and left with people, or emailed, or just used as a presentation (so think about colours and format). Always remember your slides are there to support your delivery, not replace it. The contents are often simply those in the Executive Summary part of the Business plan, but turned into bullet points for use on a screen. There should always be one, maximum two slides on financials. Finally you need a one or two page teaser - this is something that can be mailed to potential investors or introducers to get them excited about your project. The ability to sell your vision is crucial, especially in the early phases of your startup when you haven’t got a lot to show investors. But even if you’re in a good position to be pitching to investors, it’s important to know what to mention to get them interested. For a couple of ideas, see the previous chapter. Once you know what you’re going to cover, it’s time to practice the delivery, which is arguably the most important aspect of your pitch. How to pitch well A strong delivery of your pitch is paramount, and the way you lay out your arguments, facts and figures plays a huge role in that. Although we can’t help you with pre-presentation nerves, we can give you an outline of a super effective way to pitch. Here are the seven steps you’ll want to follow: 1. Describe the big picture This provides your audience with context for your pitch. Before you get into the specific details of what exactly you’re pitching, make sure you set the scene so that everyone is on the same page. You don’t want people to be confused from the start and have to play catch-up throughout your presentation, it does not make for a persuasive pitch. 2. Highlight the problem Once you’ve described the big picture, move on to the problem that you’re addressing within it. Make sure you highlight why it’s a problem, and more importantly, why it needs to be solved. 3. Present your solution Introduce your solution, show how it’s effective and better than your competitors’. You want to make your audience think “why hasn’t anyone thought of this before?”. 4. Demonstrate credibility No one will invest in your startup if they don’t think you are credible. Let your audience know why you’re the best-suited to tackle this problem. Share your relevant facts and figures, and maybe highlight one or two small issues that you are working on. It’s good to show that you know what’s happening in your business, whether it’s good or whether it needs improving. This will let investors know that you care about your startup and that you are honest. If people don’t think you’re honest, they certainly won’t think you’re credible. If you have one, point to the experience your advisory board brings to the business, strategy, and the introductions they can make - this further enhances your credibility. 5. Discuss your idea’s potential impact It’s not enough to present a problem followed by its solution to get people excited. Blow them away with the huge impact your idea could have, will it disrupt industries? Will it change the way we live our every day lives, save the environment? 6. Talk money Know your numbers and stick to them. Don’t try to bamboozle your way to an investment by fluffing the numbers, because any smart investor will be able to tell, and you will have broken their trust. They might even tell other investors to watch out, which would massively affect your reputation and chances of securing an investment. 7. Summarise End with a summary of all the key points you made during your presentation. Think of this as an elevator pitch, reiterating your idea, why it matters, and why you’re worthy of an investment. And then open up the floor to questions. BONUS TIPS: How to answer questions after a presentation: The way you answer questions after your pitch could make or break it for you. That’s why it’s important that you prepare for questions in advance. Obviously there’s no sure-fire way of predicting exactly what you’re going to be asked, but that’s not a reason not to be prepared. Try and put yourself in the shoes of an investor and think about what they might want to know at the end of your pitch. If you’re struggling, then a good solution is to practice pitching in front of others, and see what types of questions they ask. When asked a question, make sure you listen to the full question before you answer, and make sure you understand it. If you don’t, let the other person know. Don’t be afraid to pause and think after the question, you can’t be expected to know everything off the top of your head within a moment’s notice. Once you’ve responded, ask “Does that answer your question?” to check if the person who asked the question is satisfied before you move on. If for any reason you’re asked a question to which you do not know the answer, be honest and say so. This might not be ideal, but again, it shows transparency on your part. Respond by saying that you’ll look into it, and send out an email to answer the question as soon as you’ve figured it out. It’s much better than making something up on the spot, trust us. Practice Practice the pitch with friends and family (or maybe SUG’s), and to watch Dragons Den - it’s exactly what you will go through when pitching. Make sure you know your pitch and are prepared for questions.

Why traction matters Traction, also referred to as uptake, is one of the most important factors investors will consider when approached about investing in your startup. It also shows the rest of the world that you have a viable startup that on the rise. So what is traction? A simple way to put it is: Quantitative proof that there is demand for your product/service. You might think that traction = revenue, but that isn’t always the case. Depending on the industry you operate in and the nature of your startup, traction can be generated and demonstrated in different ways. Different types of traction to focus on depending on product or service offered The most common ways to measure traction are the following: Profitability Revenues Active users Registered users Engagement Partnerships/clients Traffic Naturally this is a non-exhaustive list, as the relevance of these metrics will vary from startup to startup. An example: Say you’re launching an e-commerce business and you’ve reached a stage where you need an investment. In this case, your potential investors will probably be most interested in the following: Revenue growth Average sales Profit margins Number of customers Frequency of returning customers Units sold Website traffic/bounce rate How to show traction 1. Formation of business (creating website, forming legal entity, having business collateral) Registering your business as a legal entity, creating a website, and producing business collateral (such as business cards) are some of the ways that you can show investors that your startup has traction, as it’s gone from an idea to tangible assets. If you have a business bank account, tax ID, legal advisors and a small team of people working for you, you’ll definitely be more attractive to an investor than if you were to sell them your vision without having any substance. Not only do these steps give your startup some momentum, they also demonstrate commitment and competency on your end, validating your startup as a worthwhile investment. 2. Customer base (are many people using your product/service? are the numbers rising or declining?) We briefly mentioned customers as a valid traction metric earlier, so we’ll expand on this a bit now. You might be in a position where you need funding before you can even build your product or sell your service to your target audience. How can you demonstrate traction if this is the case? By finding interested customers who will buy what you’re offering when it's available. This can come in the form of client testimonials. Just beware that a few good testimonials on their own don’t necessarily mean your product is going to take off as soon as it hits the market. If you do already have a product but don’t have the funds to fully launch it in your desired market, then you can start by handing out some free samples to a select amount of people and get their feedback. Or if you want to cover some of your costs, you can give people “early bird” discounts for being amongst the first to buy your product/service. In the video game industry for example, this is common practice. Developers often release Alpha and Beta versions of the game at a discounted rate so that real-life players can test it out and provide feedback. 3. Develop your product and team Keeping track of the iterations of your product (Alpha, Beta, full launch) is another important way to show traction, as it demonstrates the progress you’ve made and what you’ve learned in the process. Having a team working for you is also great way to show that your startup is headed in the right direction. Hiring the right team members is crucial, since it’s often said that investors bet on the jockey, not the horse. When you’re in the early phases remember to hire slow and fire fast. Hiring slow is important because you want to ensure that you’re hiring the right person for the job, and you don’t have a lot of money to spare - which is also why you need to fire fast (but not in haste). Having a team comprised of talented individuals working for you shows that you are a good recruiter and able to sell your vision well. The fact that you were able to attract gifted people to work for your startup instead of somewhere else is testament that intelligent people believe in your vision and reflect your startup’s potential. So now that you’ve created momentum, you need to create traction - which brings us to our final section below. How to build traction As you probably know, there are different ways to create traction, here are a few: 1. Public Relations (PR) A good PR plan will boost your startup’s reputation and consumer trust. Linking with influencers (who are relevant to your target audience) is often a good bet, but beware, some of them can be very expensive. 2. Advertising There are many different ways to advertise, from costly billboards to more affordable social media campaigns. You need to decide what the best way is to target your market. Ads are an effective way of promoting your solution, but can be difficult to get right and expensive. 3. SEO (Search Engine Optimisation) This only applies if you have a website. If you do have one (or are planning to), then you’ll want to make sure your website has good SEO. We could write pages about this topic, but simply put: The better your SEO, the more traffic your website will get. 4. Viral video This only really happens if you get very lucky, so don’t count on it happening to you. But if it does, you’ll need to be ready to react to the situation as quickly as possible. If sales suddenly skyrocket as a result, how are you going to adapt to meet the demand? 5. Blogs Blogs are a great way of building consumer trust, and an opportunity for your startup to broadcast its unique take on relevant topics. It also helps with improving your SEO if done right, which is the main reason most companies have a blog. 6. Social Proof (advisors, customers, media, investors) One of the best ways of building traction is through social proof, which can be likened to word of mouth. It can come in four different forms: advisors, investors, customers and the media. If you have credible advisors supporting your business, potential investors will be more likely to cast a favourable eye upon your startup, since credible advisors usually mean that the business is heading in the right direction. The same principal applies to investors. If your startup has received significant funding from investors with good reputations, that will be seen as an endorsement of your business. Big-name customers can be used to build traction as well, in the same way that a certain item gains massive value if a celebrity is suddenly seen wearing it. So if you land a celebrity customer, make sure you talk about it on your website and/or social media. Similar to big-name customers, if a reputable media channel talks about your startup it shows that it is newsworthy - which you can use to build your company’s reputation. And don’t forget to share the fact that your startup was in the news!