A global downturn in start-up funding, along with uncertainty in the aftermath of Brexit, is challenging London’s future as a start-up hub for the continent. Although this is unlikely to be a long-term trend, today’s entrepreneurs face a tough environment characterised by ruthless competition, economic uncertainty and, in some industries, skills shortages.
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My company, Sonovate, has grown from a start-up to a leader in the fintech industry in just four years. We are now competing in a very dynamic alternative finance sector that includes companies such as Funding Circle and MarketInvoice. We secured Series A funding at the beginning of this year and just closed a £14m Series B funding round in October. But while renewed investor confidence is good news, there are a number of factors which underpin this success.
In my experience, there is no right time to launch a tech start-up. To launch a successful business, a founder must display hard work, a clear vision for growth, and a natural enthusiasm for the unpredictable yet hugely rewarding journey that is entrepreneurship.
If you’re about to launch your own start-up, make sure you keep these five tips top of mind at all times.
Think ahead
Starting, and then growing, a business is expensive. Series A funding and angel investment will help you get off the ground but they can only take you so far. In an ideal world, your current investors would stay on-board and add to their initial investment. It doesn’t always work out this way and you need to have a solid Series B funding strategy prepared well in advance that includes other potential investors too.
Stay close to your investors and show them what your business has achieved with their funding. Use clear metrics to demonstrate your growth to-date and take them through your plan for the next phase. Positive numbers combined with a strong proposal is a sure-fire way to create interest and secure future finance.
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Be steady and flexible
The age of technology is characterised by speed. When it comes to starting your tech company, however, don’t be rushed into things you’re not comfortable with. Businesses that expand almost overnight may look impressive, but building a successful tech company takes time and lots of planning. You need to analyse the market in detail and find the gap that you want to own. Operational needs, including your number of staff, have to be considered carefully too. You don’t want to hire for the sake of hiring and then have to let people go because you jumped the gun.
The market can be very changeable. Give your business flexibility so that it can shift direction as and when necessary. Be open to a certain degree of change. Sonovate launched as an all-in-one solution for entrepreneurs looking to start their own recruitment agencies but we pivoted our focus to invoice finance when we identified a need in the industry for an alternative to the banks’ outdated solutions.
Have a co-founder
Do not underestimate the value in having a trusted partner on board who shares your vision. Starting a business is very hard and can be incredibly stressful. The only other person in your life who will be able to empathise, carry some of the load and actually help, is your business partner.
Every day there will be problems that need solving. Some will be small and irritating, others will potentially make or break your business. They will all need time and attention to resolve and not all will be within your areas of expertise. A co-founder can provide an alternative point-of-view and bring extra skills and experience to the table – all of which can be helpful and supportive during high-pressure times.
Get help
Know this from the beginning: you won’t be able to do this alone. To get your business successfully up and running, and prime it for growth, you need a strong circle of support. This can be made up of your investors, fellow entrepreneurs, business mentors and staff.
Don’t isolate yourself and make the road to success even bumpier. There are many established businesspeople who have been right where you are and will happily offer you support and advice. The lessons they’ve learned from their journey could save you precious time.
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Hire the right people – and keep them happy
When the time is right, strategic hiring will be crucial for getting your business off the ground. In addition to having an excellent skill set, you need to look for people with a certain character that will thrive within a fast-paced start-up environment. They must have proven expertise in their field as well as a get-stuff-done attitude. Hire energetic, clever people who will stick with the business as it grows – and then hold onto them.
As any business grows, its culture can change. Creating an atmosphere of intimate collaboration gets harder the bigger you become, but it’s not impossible. It’s up to you to keep all lines of communication open with your staff and stay true to your vision.
Damon Chapple, co-CEO and co-founder, Sonovate
After spending almost two decades in recruitment, Damon wanted to do something uniquely different. Having encountered all the barriers involved with financing and running contractors first hand, Damon set-up Sonovate to challenge the stagnant finance options on offer and provide a new solution tailored specifically to the needs of the contract recruitment sector. Damon is using his experience of building businesses all over the world as a group director of a global recruitment brand, to drive Sonovate into the market transforming solution it is today.