Tips for approaching funders
Tips to remember when approaching funders
Useful points were made by representatives from the various Biotechnology Regional Innovation Centres (BRICs) and the Innovation Fund at the 2008 Bio2Biz conference on points to watch out for when applying for funding to ensure success:
- Ensure that your funding requests are aligned with the funder's requirements and objectives and check their website for these guidelines and details before contacting them, e.g. their risk appetite, stage at which they offer funding, level of funding offered, BEE requirements, etc.
- Is your business plan customer focussed? Who are they? How will they buy? How will you get your product to them?
- Take time over the financials. Often they are seemingly added as almost an afterthought! Think about working capital especially as cashflow (or the lack of it!) can kill a business even though everything else is great - excellent product, marketing, customer take-up, etc. Ensure that the different elements of your business plan (e.g. your marketing strategy) link in and tie back to your financials, so that your plan is well thought through and cohesive. Also state your various assumptions clearly and provide an indication of the information they are based on.
- Convey your passion! Be willing to persevere. Show your commitment - that you too are taking risks and investing in the venture.
- Be thoughtful about the things that could happen (risks and how you would overcome them)
- Show that your team has the capacity to manage the business/project.
- Don't think of the funding as a "once-off cheque" - the funder is looking to build a long-term relationship with the entrepreneur, so that they can monitor their investment.
- Be open and honest in your communications. E.g. if you suddenly identify a threatening competitor, advise the funder so that you can jointly deal with the issue.
A very good tool to use in developing the business model around a technology innovation, is the business model canvas. Various resources are available on the Internet as well as a free short course on “How to build a start-up” at www.udacity.com. Being able to provide a clear picture on your fundable proposal is very important to funders.