Get Down To Business
The funds that will get you started – taking your idea from brain to reality.
So you failed to get onto the graduate scheme of your choice. You also failed to get onto the ones you didn’t want to do but applied for because you were a shoo-in, 40 grand would do for the first year and you knew you’d be promoted to SVP in under 18 months. Sorry – yeah, you failed to get on that one too. It’s sort of like the time you applied for one ‘joke’ university as a ‘safety choice’ and then got rejected. Somewhere in a Sliding Doors alternative universe where you didn’t get accepted to your first choice university, you’re actually a shift manager at McDonald’s.
But whatever. You’re sure you’re one of life’s winners. You just haven’t won yet.
Instead of taking a gap yah, why not start a business? If that guy who invented Reggae Reggae Sauce can do it, you surely can – you’ve been mixing bespoke secret sauces for years and more than half of them do not make people gag. What’s more, the government wants you to do that a lot more than it wanted you to go to university in the first place: it’s backing organisations like Student Upstarts, which has over £100m available for current students and very recent graduates to help kick-start their business.
Let’s face it – it’s that or plunge through the looking glass and put on that McDonald’s uniform. You’ll have to buy your own hairnet.
This is The Tab’s guide to the resources you should be using in order to acquire the first, vital stage of investment, and the schemes it’s worth looking out for if you want to break into the entrepreneur world.
WHAT: ‘We find and support exceptional graduates to build their own high-growth startups’. Entrepreneur First is a cross between a startup accelerator and a recruitment consultant for the tech industry: either you approach them with an idea and/or team, or you approach with neither. If they think you’ve got the ‘talent, skills and character’ to build and scale a successful startup, they’ll accept you onto their programme.
WHERE: London. The most recent wave of recruitment took place between October and December 2012; this summer, Entrepreneur First will introduce the successful applicants through team-building exercises and events like Code First: Girls, aiming on teaching female graduates basic coding skills. Then things step up a gear: September – December 2013 will be about executing the first stages of your ideas, (supported by Entrepreneur First, who will provide mentoring, office space, training and access to a network) with the aim of applying for the first round of seed funding by March 2014. Entrepreneur First won’t disappear once you’ve got off the ground, but they expect you to be self-sufficient in under a year.
BEST FOR: Serious achievers – you’re going to have to be smart, focused, intuitive and tireless. If you had a mental breakdown during your exams, you probably shouldn’t apply.
You need money. You wince every time you receive any correspondence from the bank, lest it demands that you pay back your entire overdraft. Your parents won’t answer the phone because they know you don’t care how the tennis club social went, you just need some cash.
Obviously, if you need the cash for interrailing/festivaling/drinking, Start-Up Loans won’t be much use. But if you’re not a pisshead and, in fact, need money to get your business off the ground, this is one of the best resources out there. The scheme, aimed at 18-30 year olds (who live in England – sorry rest of the UK), is intended to provide the first cash injection necessary to launch a business. The average loan size is £2500, although what you get ultimately is determined by your business plan. You’ll have to pay it back within five years at a fixed interest rate of 6%
WHERE AND HOW
Register to apply for a loan, and when one becomes available in your region, your registration will automatically equal application for the funding. You’ll then be allocated a Delivery Partner, who’ll look at your business plan and assess whether your funding application is successful. If it is – they’ll assess how much you should get and work with you as a mentor to develop your business plan and long-term objectives.
Anyone – it’s one of the best ways of getting an idea off the ground.
Get straight to the money: Student Upstarts allows you to apply for investment of up to £15000 in exchange for up to 8% equity in your tech startup. There’s one rule: one member of your team must be a full-time student (undergraduate, graduate or PhD) or have graduated within the last twelve months. Like University Challenge. Apply with your business brief and if successful, you’ll be supported from start to finish: from the early stage to launch to mentoring from industry leaders. Investment comes from Nick Wheeler, the former student entrepreneur who founded Charles Tyrwhitt, and support will be provided by co-founders Christian Jakenfelds and Matthew Stafford. Student Upstarts is also a delivery partner for startup loans (see above): a government backed scheme to financially support and mentor young entrepreneurs. You could score between £500 and £15000. Kerching.
WHERE AND HOW
Based in London – you can find it online at studentupstarts.com. You can apply for funding as long as you attend or recently attended a UK or European university. Applications involve detailing your business plan and long-term objectives.
Budding app developers and tech moguls of the future. Probably better for those with a head for numbers. We’re looking at you, economists.
By now, you’ve probably received a Facebook plea from one of your few childhood friends who didn’t get fat, pregnant or fired from the McDonald’s job you didn’t take (the hairnet life wasn’t for them either it seems), asking you to support their business on Kickstarter. Even more than the bewildering success of the Reggae Reggae Sauce man, this unanticipated success (their Year Four report read, ‘unresponsive to encouragement, light or loud noises’ – you know because your mother told you smugly) should convince you that you could be doing this too. Especially with a website like Kickstarter; launched in 2009, upload your business plan onto the public forum and (hopefully) kind members of the public and Kickstarter community will invest. Since it launched, more than 4.1 million people have pledged over $360m to fund 42 000 projects. Backers don’t benefit financially. So no: unfortunately you can’t make a killing from investing in said childhood friend’s project thus bypassing the effort involved in launching your own.
WHERE AND HOW
Based in New York but open to UK and US residents. Project must fall under one of the following categories: art, comics, dance, design, fashion, film, food, games, music, photography, publishing, technology and theatre – and it must be a ‘project’ in the sense that it can be completed, resulting in a ‘finished product’.
Those who believe other human beings will intuit the inherent value in their blog.
Essentially a Kickstarter aimed specifically at those in education – whether that’s at school or university. Upload a creative project with a pitch and a minimum amount of funding required, and hopefully convince family/friends/kindly strangers that it’s got business legs. Around two-thirds of the projects created on Sponsorcraft are successful; if yours is one of them, Sponsorcraft applies a 5% and PayPal also applies a 3.5% fee for any payments processed.
WHERE AND HOW
Find it online at sponsorcraft.com. Now offering services in seven countries: the UK, USA, Ireland, Australia, New Zealand, Greece and Hong Kong. Application process involves a detailed pitch including how you plan to manage the business long-term.
Those who believe other human beings will intuit the inherent value in their blog and prefer interacting with a slightly less polished website.
Can you recommend any resources? Have you got a business plan that would send Sir Alan running to the cashpoint? Stay tuned for more in The Tab’s startup series.