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18/08/2014

Dr Melanie Goward goes behind the fundraise at Venturefest

I was pleased to see Cardiff host Venturefest, the innovative networking event for technology entrepreneurs, investors and innovators, for the first time this year.  I hope it achieved its goal of inspiring some future Welsh entrepreneurs.

This year I teamed up with Bill Mullen, chief executive of Momentum Bioscience, one of the tech ventures in Finance Wales’ portfolio, to host a workshop looking at the fundraising process.

Together we wanted to demonstrate to young businesses what really goes on when a company raises investment funds.  We also wanted to highlight how much preparation goes into fundraising as well as the commitment required to grow a company successfully from the early days.

An investor’s perspective

For entrepreneurs, understanding what investors are looking for is a key challenge in securing seed finance.  Typically investors are looking for:

  • A compelling idea that offers an innovative and elegant solution to a real problem.
  • A strong core team – any early stage tech venture requires the right mixture of people and technical skills to succeed.
  • Longevity.  Not only does new technology need to be robust, it also needs to have real and sustainable advantage over competitors.
  • Real potential - the commercial opportunity the technology creates needs to have substantial value.

If at first you don’t succeed…

Added to this, fundraising doesn’t always go to plan.  For example, Momentum Bioscience (Momentum) first approached Finance Wales for seed investment in 2011.  Their proposal ticked lots boxes at the time and we almost agreed a deal, but it wasn’t until 2013, however, that Finance Wales invested in Momentum. 

This time, with several co-investors on board we were able to structure an investment deal that was considerably larger than the 2011 proposal. Ultimately, success came down to two key factors in this case:

  • If an early stage company has a robust business plan and a strong proposition, investors will stay interested and try to reach a deal.
  • A team of people behind the idea who can convince investors that they’ll make a success of the business.  Momentum built a relationship with Finance Wales’ tech ventures team before securing investment from Finance Wales in 2013.

Know your assets

As an early stage technology company, your technology is just one of your assets – your people will also have a key part to play in securing investment and driving commercial success.

What next?

If you think your business could benefit from an early stage seed finance then contact us today to speak to one of our local Investment Executives.