SaaS Startup Investment Funding
Currency Cloud, one of London’s FinTech startups, has recently raised $18 million in its latest funding round. With investors including Sapphire Ventures, Anthemis, Atlas Ventures, Notion Capital and Xange, total funding since 2012 has now reached $36 million. Processing $10 billion in payments per year with money transfer technology for businesses, Currency Cloud is a true startup success story.
The upward trend of startup fundraising continued last year to more than $47 billion – a 62% increase on the previous year’s figures. Venture capitalists are putting more money into startups, but particular ideas and industries are favored. While popular consumer apps tend to receive a lot of attention, the investment in them is comparatively small. Industries with environmental conditions that promote success are emerging as valuable investment opportunities.
Funding is happening in larger chunks over fewer rounds. Uber, for example, raised more than a billion dollars in each of its two funding rounds, and Airbnb pulled in $475 million in one round of investment. But consumer tech isn’t stealing the entire capital pie. Venture capitalists are, predictably, focusing on obvious trends such as mobile technology – in 2014 $7.8 billion was raised for this sector. However, biotechnology and pharmaceutical companies are also attracting significant investments with new regulations reducing lawsuits against biotech firms and the ACA dramatically increasing demand in the healthcare sector.
Get Rich Quick
While a tiny percentage of startups have received global attention and massive funding, the failure rate is high. Well researched ideas that take advantage of the latest trends are important, but there’s a lot more you need to get right and a heap of luck helps too. Forbes offers startup investors some advice, including investing in known markets, checking up on founders, researching the use of funds and investigating financials. Startups looking for investment need to offer a strong, secure opportunity that boasts quality leadership, transparent systems, and superior products or services.
Entrepreneur takes this advice further and insists that you provide proof of potential success, establish trust and put together an experienced team that works well together. Your business plan needs to be impressive, and your product has to be unique, desirable and credible. Be sure to focus on the right investors and put together a strong marketing strategy that ensures investors you’re pulling out all the stops to grow a remarkable enterprise. And any investors who think you’re only in it for the money, won’t be handing their money over to you.
In the end, many investors are looking for companies that will go public. This ensures millions can be raised from regular people, and also increases the value of the initial investments. The IPO process gives your company the government stamp of approval, opening the doors to investment from the general public and giving early investors the chance to make high returns. Of course, the investment bankers also want you to IPO, getting 7% of all the money you raise.
Growing Your Business in the Modern Economy takes advice from six venture capitalists to give you insight into how to manage growth and risk, and make sure you get your share of the available financing.
(Infographic Credit Source: http://tech.co/)
By Jennifer Klostermann