Introduction

Welcome to the first Guide to Finance for Young Companies from YCF Scotland.

The Guide is particularly targeted at young companies which need external investment (typically equity) to achieve their objectives, often but not exclusively technology companies. 

There are many other resources for finding out about finance for starting and growing companies, and we have listed a number of them elsewhere in this Guide.  What makes this Guide different from other sources of information is its focus on the needs of entrepreneurs heading companies with high growth potential:

• very simply, we list only those organisations which invest in or lend to companies directly  -   other sources include for example various government schemes for supporting innovation and entrepreneurship, even though many of these are delivered by third parties;
• many other sources tell you about business angel investing, or venture capital, or loan funding without naming the providers  -   we give comprehensive listings of investors and lenders known to be interested in supporting companies in Scotland;
• other sources include helpful advice about other aspects of business development – marketing, human resources, exporting, and so on  -    to keep matters simple, this Guide focuses solely on raising funds;
• there are many initiatives for funding the commercialisation of university and other research  -   we include only those sources of funds which are available to companies (or individuals intending to start companies), as opposed to researchers;
• there is much more to securing finance than simply contacting all the investors in a list  -   our guidance articles are intended to help entrepreneurs think about the questions they should ask themselves before starting to raise funds;
• the funding landscape changes very quickly  -   our Guide is produced as a printed publication, and as a website (URL.co.uk) which will be regularly updated.

There is no source of information on finance for early stage companies that can guarantee to cover every possible investor and lender, and nor is this desirable. At some point it is crucial that companies looking for finance do some research for themselves (and we include a guidance article on this very subject). 

What this Guide does attempt to do is to illustrate the range of financing options available, describe some of their criteria and restrictions, and give some advice on what sort of finance is appropriate for different types of company at different stages of their journey.  It is hoped that this will provide a suitable platform for companies to consider their own circumstances and ultimate ambitions, find some examples of how the market currently operates, then work out a strategy for meeting their own funding needs and start engaging with suitable sources of finance.

Jonathan Harris

Editor