Recap: How do startups get funds?
This past Wednesday, Startup Victoria partnered with Standard Ledger to host “4 Ways to Fund Your Startup” at Stone & Chalk. This was an awesome event where 4 panellists came on stage to chat and answer questions about various types of funding available to startups.
Standard Ledger is a Melbourne-based company that provides financial advice to startups and SMEs here in Victoria. If you’re looking for help or don’t know where to start, get in touch with them! They also offer a free Startup Funding Guide on their website, full of incredibly useful information about how startup funding works and how to get it. Go check it out!
First, we had Ben Kluwgant, Government Incentives Advisor at Catalyst Solutions Australia. He presented a lot of really valuable information regarding government incentives for innovation that startups can take advantage of. One, in particular, is the R&D Tax Incentive, a tax offset of 43.5%. These incentives are a great way for startups to get the funding they need without giving away equity.
Second, we had Brendan Bennett, Head of Partnerships at Fundsquire. He chatted about R&D Financing, which empowers founders with debt loans done using the R&D credit mentioned above. Financing your startup with debt is another great way to get funding without giving away equity.
Third, we had Ariane Barker, CEO of Scale Investors. She told us what VC funding really is and gave some highly interesting pros and cons. Giving away equity—even for funding—isn’t always appealing to founders, but it can be extremely useful. These investors usually have large networks of resources and support for startups that portfolio companies can take advantage of.
Fourth, we had Shannon Gilleland, Founder of Pronto Bottle. As a founder, she was able to give her story of looking at so many types of funding: bootstrapping, “friends/family/fools,” pitch competitions, accelerators, and crowdfunding. She had some amazing tips, the most impactful of which was, “Plan.” If a founder spends months working on getting VC funding and then it doesn’t work out, they need to have a Plan B. Maybe even a Plan C… Plan D…… and EFG? Planning ahead is a great way for startups to prepare for any unforeseen circumstances.
If you want to get in touch with one of these panellists, check them out on LinkedIn! Links are provided in their names.
At the end of the night, there are a few really important bits of advice from the group:
- Work out which type of funding works for you and your company, ideally as soon as possible. That might—and probably will—be a mixture of forms.
- Plan far ahead so that when issues arise you have plans to combat them.
- Have conversations with a lot of people. Even if you don’t know if you want VC funding, chat with investors. Chat with a debt company. Definitely chat with a financial advisor.
- Be honest. You might really want secrecy, but that tends to drive help away. Prospective funders want to know what they are funding—pros, cons, and everything else.
If meeting other founders and members of the startup community sounds like something you need or want, come to Startup Victoria’s new event series, Founder Connect. These are structured breakfast networking sessions designed to help make those connections that are so important in startups. They’ll happen Thursday mornings on a fortnightly basis. Our second event was just this morning, and we had a great turnout. Keep an eye out for when registrations start for the next session on Thursday, November 28th!
Have a great day!
Photo credit to Kristy Pask, Standard Ledger.