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The amount of venture capital investment in the UK slumped 45 per cent in 2023, dropping to a 22-quarter low at the start of 2024.1 Funding in the UK has dropped for three consecutive quarters, with minimal rounds taking place for later-stage companies.
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With rejection rates from VC investors in the UK estimated to be as high as 54%, the experts at venture capital group Oxford Capital have shared insights on how start-ups can stand out and secure VC funding in Q4.3
How start-ups can stand out in 2024:
Mark Bower-Easton, Head of Distribution at Oxford Capital, shares his strategies for how starts-up can stand out in Q4 to secure VC funding:
1. Strengthen your proposition:
“When pitching your startup, it’s essential to clearly articulate the unique value your company offers that sets it apart from your competitors. A well-defined mission statement that addresses how your start-up solves a specific problem or meets current market demands, while also addressing potential investor concerns, can make a significant difference. Ensure that focus remains on the market size and growth potential compared to having too much of a focus on your product offering, an investor needs to understand the bigger market picture rather than just the product.”
2. Showcase financial health and path to profitability:
“Investors are increasingly looking for evidence of financial stability. Even if your start-up isn’t currently profitable, it’s crucial to clearly outline your path to profitability. Present this information coherently and confidently, highlighting relevant market trends and explaining your growth strategy. Back up your claims and explain the clear trajectory towards financial success. This will make your start-up more attractive to potential investors.”
3. Demonstrate traction, growth and scalability:
“To attract venture capital, it’s essential to showcase your start-up’s traction, growth and scalability. Emphasise your growth trajectory with concrete data and outline strategies for scaling operations efficiently. Investors need to see that your start-up is capable of generating a significant return on their investment (ROI), so make sure to discuss how you plan to optimise the process and leverage technology to sustain growth, demonstrating the potential for substantial returns.”
4. Build strong relationships:
“Networking and building strong relationships with investors should be a priority long before you seek funding. Leverage digital platforms and social media to build an audience and connect with relevant communities and investors. Showcase your passion for your niche and engage consistently. Additionally, focus on developing a strong team that compliments the start-up’s mission. Highlight the diverse strengths within your team, as VCs often invest in the people behind the start-up as much as the startup itself.”
5. Find the right investors:
“When trying to secure VC funding, it is critical to thoroughly research and approach the right VC firm for your business. VC investors focus on different industries and deal sizes, so it’s very important to tailor your pitch to demonstrate a clear understanding of the investor’s preferences and portfolio. Establish personal connections and ensure your startup has a competitive edge.”
Credit: Oxford Capital
