Angel Investor News provides the latest in investment, finance and funding from an investor and entrepreneur's viewpoint.
As an entrepreneur many may find it hard to acquire an investment to promote growth for their businesses.
The problem however does not lay with identifying where to obtain funding but rather how to be eligible to attain it. So what is a suitable, fast and effective way of obtaining funding? Angel Investor News decided to find out.
A possible source of funding would be the ‘Regional Growth Fund’ (RGF). The Regional Growth Fund is a government led programme which is available to entrepreneurs across the UK which aims to support projects that are seeking to raise investment for both business and economic growth as well as sustainability.
This £3.2 billion Regional Growth Fund has been identified as being aimed at helping communities to transition to a more sustainable private sector led growth as opposed being dependent on the public sector.
With the Regional Growth Fund in place, entrepreneurs across the UK are able to benefit from a reliable source of funding which brings upon the added incentive of promoting job creation. Quite recently we identified from an external source that the scheme has already provided over £56m to companies in the north east region of the UK.
However in a report earlier this year, it was identified by the BBC that ‘More than three quarters of a government fund set to boost regional economies remains unspent’.
A close source who preferred to remain unnamed and is currently responsible for the application process, stated:
‘The Regional Growth Fund has billions of pounds available to UK business and entrepreneurs, however so little is spent due to the complexity of the application process. This is unduly caused by the time spent trying to identify and exclude inexperienced and naive entrepreneurs. As well as once the application is accepted, the length of time taken to carry out due diligence by representatives to identify risks faults in the application.’
Angel investor News then decided to look at the offering available to the entrepreneur seeking to raise funding for their business via Private Equity or through Private investment. We found an Investor matching portal called Venture Giant and asked our source to comment on Venture Giant’s offering. They stated:
‘The diversity of deals done submitted to Venture Giant certainly is remarkable and they seem to pick up exactly where government funding schemes fall short… I was particularly impressed by the entrepreneur from Bournemouth that raised £200,000 of investment for a Start-up care home whilst he only posted a requirement of £20,000. This is exactly where Regional Growth Fund is failing UK business by just going by what the entrepreneur is looking to raise as opposed to objectively looking at the venture and offering mentorship on what exactly is required to make the business an economic success.”
The entrepreneur that successfully raised the investment for his care home business, John Hughes, was able to benefit from the Venture Giant platform by posting a one page investment proposal on and having the investor matching platform send the proposal out to hundreds of, what they state are, vetted investors.
From a single investor contact made – the investor (not named for privacy reasons by Venture Giant) looked at the proposal and stated to Mr Hughes that £20,000 would not be enough capital for what he was trying to achieve. This is something the Regional Growth Fund fails on, as Mr. Hughes would have been immediately declined. Instead the private investor found through Venture Giant stated that ‘more like’ £200,000 of investment would be required to make the venture profitable – and the investor invested in the Care home.
When Angel Investor News looked at the deal structure, it was a refreshing change to find that Venture Giant did this all on a commission free basis. This serves as a real testament to the fact that online platforms such as Venture Giant are working and making a real social impact for the UK.
We called to question how a business model like Venture Giant could operate on a commission free basis, and Mr. M Beghoe, who is responsible for looking over the deals that Venture Giant receives, stated that they can receive over 15 to 20 deals a day to look over, and there revenue model is based upon a streamlined way of looking at proposals, which means that they can deal with a large quantity of proposals whilst maintain quantity throughout the site. It was also stated, that most proposals were referred to them via word of mouth or repeat customers, which was another way costs could be kept low.
Angel Investor News looked at other success stories on Venture Giant and another investment that had a Social impact was a Special needs Care Centre that was looking to raise £25,000 through Venture Giant.
In accordance to the website, an entrepreneur by the name of Ms. Hale who had a vast amount of experience as a teacher featured a proposal on Venture Giant that sought to raise investment to create what was defined as a therapeutic interventions centre.
What resulted was an investment of £25,000 from a private investor, with what she described as a ‘dream investor’. In a personal message to Venture Giant, Mrs. Hale stated;
‘I am pleased to say that I did find an investor through venture Giant and have been delighted. Funding is about to be released and I am due to start renovations that will enable me to open Forest Lodge Edu-Therapy Centre by the end of April … I thank- you for bringing us two together as I think that I found my dream investor through your site.’
Another success story with a social impact was from an entrepreneur that Venture Giant classed as a ‘Mumpreneur’ – a new wave of Female entrepreneurs that can balance parenthood with a working career -was seeking funding to start a nursery in Derbeyshire. Venture Giant was able to secure £50,000 of investment by introduction of an experienced investor that could mentor her on how to build and grow her business, something the Regional Growth Fund clearly needs to address if the businesses they invest in are to grow and thrive.
In an interview with the Founder of Motivating Mum, a website dedicated to promoting Mumpreneurs in the UK, Alli Price (Founder) stated that Venture Giant was a recommended service because:
‘Mum’s in business are often small start-ups needing all the help they can get, for as little as possible, and being able to list their details for free ticks all the boxes! This means that their business ideas are being seen all over the UK with no initial investment and this is really the best opportunity they can get.’
The ‘Autism Centre’ and ‘Care Home in Bournemouth’ as featured on Venture Giant may not have been able to secure the required investments with the Regional Growth Fund due to the extensive application processes and due diligence involved in the process of obtaining Government funding and business grants.
Venture refers to itself as having the lowest pricing model in the industry, with the process working by entrepreneurs being able to submit their proposal for a review where once approved it is sent to a database of vetted investors which are matched based upon their investment range, location and industry.
With so many alternative methods available for securing funding, it is definitely an upward struggle trying to obtain it. However, online services in the private sector like Venture Giant are making strides in bringing entrepreneurs and investors together both rapidly and effectively.
It seems possible to state that Venture Giant is certainly an easier and more accessible platform for entrepreneurs to obtain investment than through a government led programme such as the Regional Growth Funding scheme.
Entrepreneurs interested in finding Angel Investors can visit www.VentureGiant.com for further information. Business Grants and ways to raise business funding are located at the official Government website for the Regional Growth Fund available to view at: Understanding the Regional Growth Fund
Venture Giant (2014) Venture Giant News [Online]:
BBC (2014). BBC [online]: ‘Most of Regional Growth Fund unspent, report finds’ Available: http://www.bbc.co.uk/news/business-26332774 [Last Accessed 28th May 2014, 12:18].
HSBC (2014). HSBC [online]: ‘Regional Growth Fund- Assisted Asset Purchase Scheme’ Available: http://www.bbc.co.uk/news/business-26332774 [Last Accessed 28th May 2014, 12:18].
The Journal (2014). The Journal [online]: ‘Justice Minister sees how growth fund benefits in North East Companies on visit to region’ Available: http://www.thejournal.co.uk/news/north-east-news/justice-minister-sees-how-growth-6949584 [Last Accessed 28th May 2014, 12:18].