Why building a startup business shouldn’t rely on the Government.
Startup Britain figures show that there were 5,974 startups in the Cardiff CF postcodes last year. That’s an impressive number of new businesses for the size of Cardiff, despite the debate about lack of access to finance and support. As is normal, some of these businesses will fail.
Too often startup businesses in Wales complain that there is not enough support from the Welsh Government. Many say they have not been able to get funding from Finance Wales and now have the “Access to Finance Report” to support this view.
There is funding for startups in Wales. Funding is hard to get. It will always be hard to get and so it should be. Some feel they are entitled to funding simply by virtue of having started a business.
This simply shouldn’t be the case. Funding for early-stage businesses normally comes from the founder’s own resources, then friends and family. After that, and most importantly, funding should come from sales. If you don’t have customers, you don’t have a business. If you have proven there is a need and desire for your product or service and customers will repeatedly want what you do, then you should be able to find funding.
If you have no customers then your business will fail, and fail fast.
Last week, I sat on the Investment Committee of Seed Mentors from which a group of promising Welsh businesses are likely to receive funding under the SEIS scheme.
Xenos, the Wales angel investors network, invested over £2 million in startups last year. Finance Wales invested a similar amount in the startup sector last year. Other angel investors invested more than these amounts without any fanfare or Government involvement.
We should not expect the Government to support unsustainable businesses that don’t have customers.
Acceptance of failure is often sighted as the reason for Silicon Valley’s success. Importantly, business or technical failure is considered experience and not an indelible mark of incompetence. Learn the lessons of failure and move on. Don’t be afraid of failure.
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Indycube Ventures offers funding and expert advice to entrepreneurs. Entrepreneurs and small-business owners based at coworking space network Indycube are being offered access to a half-million-pound annual funding stream and expert advice.
"We have benefited greatly from David's experience, counsel and contacts on a wide range of issues. His past experience in the IP space is particularly useful to Inngot, but even without that, he is just the sort of investor and non-executive director a high growth business needs. He sees potential, makes connections, and keeps us focused on the things that matter."Martin Brassell, CEO, Inngot Ltd