Tech for good funding routes
Whether you’re a fresh-faced startup or a scaleup with a few years under your belt, securing funding in order to scale is an ongoing challenge.
Data from Big Society Capital has shown the UK’s social impact investing market has risen dramatically from £850m to £5bn over the last eight years. Interestingly, much of this growth has come from alternatives to traditional bank lending.
Big Society Capital also noted that the diversity of the social impact investment market has enabled different types of investor to enter the market, and increased the availability of finance options for social enterprises and charities.
That’s good news all round for tech for good startups. But, with so many funding routes to go down, where do you begin?
Different funding routes
From Angel investors to incubators, there’s a lot of options. These include, but are not limited to:
Debt funding and loans
VC (Venture Capital) funds
So, which route is best for tech for good or social impact startups? Here are three funding options you should have on your radar:
Social impact VCs
There's a growing demand for investment routes that positively impact society whilst providing market rate returns, as Tech Nation’s data demonstrates:
Source: Tech Nation
These include the likes of:
BGV is Europe’s leading early-stage tech for good VC. They back ambitious founders using technology to tackle big social and environmental problems that aim to radically improve millions of lives. In nine years, the team have:
Backed 141 tech for good ventures
Raised £98m of follow-on investment by their portfolio
Gained 16.9m users of their portfolio companies’ products and services
Employed 563 people by their portfolio companies (43% of which are women – well over double tech sector average)
Read more about their impact, here.
Here are some other great social impact focussed funds to look into:
Another route to consider is a public crowdfunding round.
Platforms like Crowdcube and Seedrs enable businesses to harness the power of their communities to raise funds. This also gives everyday investors the opportunity to back the businesses they love. Both Crowdcube and Seedrs have helped raise finance for a number of tech for good and social impact startups. They were recently named the top two investors into UK cleantech companies by Beauhurst.
Government funding and grants
It’s worth investigating the funds provided by the government, especially the additional provisions made due to the pandemic.
A popular route is the Start Up Loan scheme. Launched in 2012 to encourage entrepreneurship, it’s a government-backed personal loan of between £500 and £25,000 available to anyone looking to launch or expand a small business. The interest rate is fixed at 6 percent per annum, and the loan can be repaid over one to five years.
There are also a number of other organisations who offer grants specifically to social enterprises, such as BBC Children in Need, The National Lottery Community Fund and Trust for London.
With so many ways to go about sourcing funds, it's important to choose what’s best for your business on an individual basis. We expect funding for tech for good and social impact startups to continue to rise, meaning greater opportunities to fund your venture and build a better future.
We’d love to hear your thoughts or experiences with securing funding. Get in touch on LinkedIn and Twitter, or drop us an email at email@example.com.