In the UK, convertible loan notes have become a popular option for startups and early stage companies looking to raise finance. These are financial instruments that allow investors to lend money to a company in return for the option to convert that loan into equity at a later date.  When an investor buys a convertible loan note, they are, in essence, lending money to the business, but when certain conditions are met, that money can then be converted to equity or shares. Typically, this conversion occurs when the company satisfies certain conditions, such as a new funding round or an…

Crowdfunding has become an increasingly popular form of funding for entrepreneurs with a good business plan, or early stage companies looking to take their business to the next stage of its development. In the UK, crowdfunding is well established and regulated by the Financial Conduct Authority (FCA). In this article, we will explore the landscape, and look at the pros and cons of using crowdfunding as a financial tool for a business starting out, or growing. What is crowdfunding? Crowdfunding is a way of raising money through the collection of contributions from investors through a crowdfunding platform. Examples include Indiegogo,…

One of the most important factors behind the success of every startup and scaleup is adequate funding. Without it, the business won’t be able to move to the next stage of its development. Fortunately, for businesses operating within the United Kingdom, there are plenty of support and UK startup funding options for a businesses with plans to grow. Here, we look at some of those options, as well as the importance of seeking sound legal advice throughout the funding process and the business lifecycle. Government UK Startup Funding Options When looking for business funding, the first place to look should…

Wherever a business is in its lifecycle, funding is a critical factor in driving growth and, ultimately, success. Many businesses do this through venture capital. In this article, we explore the pros and cons of venture capital, particularly in terms of seed, scaleup and series A funding and how these forms of venture capital can provide the resources and expertise to maximise the potential for success. The Pros and Cons of Venture Capital Funding Advantages of venture capital funding In the earliest stage of any business venture, funding can be one of the biggest challenges. Securing a loan for an…

Peer-to-peer (P2P) lending has become increasingly popular with entrepreneurs and small business owners as an alternative to a traditional bank loan for a startup, or to fund an existing business venture. Loans are typically offered via a website operating as a P2P marketplace, using financial technology, to connect borrowers directly with investors. In doing so, the middleman – the financial institution – is removed from the process. In the case of a P2P loan, an investor opens an account and deposits money which is dispersed in the form of loans. The investor’s goal is to achieve a better return on…

Becoming a minority shareholder or investor in a business may lead you to believe that, given the limited rights you will have, there are not many important considerations to take into account. However, even a minority investor needs to protect their interests as much as possible and to be able to share or exit its investment in a fair manner. While minority shareholders may not usually benefit from voting rights, it is important to ensure they have access to drag along or tag along rights which provide them with a fair exit. All investors need to know what their rights…

Acquiring part of a business through the purchase of shares is one way to secure an investment. You may be contemplating a partial investment or an outright purchase of a business, either way the same considerations apply. Careful analysis of the target business is critical as there are a combination of commercial and personal factors which one needs to be aware of when investing via shares. It’s also essential to ensure the correct documentation is completed. Our advice is to research, review and risk assess. If you are in need of legal advice for a Shareholders Agreement book a free…

Today, the smartphone in your pocket is capable of more than the most advanced supercomputer available 25 years ago. In the past couple of decades, we have seen technology push boundaries further than we could ever have imagined, but more recently, this trend has exploded - innovative tech is growing at an exponential rate. What the next 50 years hold is anyone’s guess, but what we do know is that, right now, there is no shortage of funding sources for businesses developing innovative tech solutions, or even an entrepreneur with a great idea. Here, we look at some of the…

In light of the spiralling cost of traditional forms of energy and an increasing urgency to hit clean energy targets, renewable energy solutions are becoming more attractive, which is why, more companies are investing in sustainability, cleantech and the drive to net zero. The period 2000 to early 2002 alone saw £80.95bn invested from 2,400 investors into the sector in the UK – equivalent to 18% of all European investment in the sector. Energy production had the highest level of investment at more than £20bn, followed by energy asset cleantech at £17bn.   In this article we look at some of…

You may need finance for your business to fund growth projects, maybe to fund the purchase of plant and equipment, diversification, or expansion.  Maybe the need to raise finance is to complete a management buy-out, to acquire a competitor or a complementary business, to purchase a freehold or leasehold commercial property, or to invest in a new corporate project. Whatever the reason you need to consider the finance options open to you and their potential pros and cons.  The devil is in the detail when it comes to commercial finance. Once you have identified your preferred funding provider and cleared…