Start-up funding: 5 tips for building a winning business case
Today, start-up funding opportunities are numerous and come in multiple funding rounds throughout each year. Still, despite the wealth of options to fund your innovative start-up, accessing these attractive pools of (often non-dilutive) funding requires several essential steps to be taken, one of which is to build a strong business case. On this page you can find our 5 tips to help you achieve this.
Start-up funding: the business case
Whether you are a small SME, a start-up or spin-off, if you are trying to obtain funding such as the EIC Accelerator program from the European Commission, you need to have a strong business case. Preparing this enables you to take a disciplined approach to critically examine each start-up funding opportunity, the alternatives, the project stages and the financial investment to make a recommendation for the best course of action to create business value and have a good company evaluation. Your business case should be clear, simple and provide a realistic & logical financial base for the implementation of your project/idea. If you have a strong and very understandable business case it is easy to convince anyone to support you in your journey! This applies to SMEs, start-ups or spin-offs that are pursuing non-diluted funding, but also for attracting investors. So, what do you need to keep in mind when you want to build a business case?
Tip 1: Business Opportunity
First of all, you need to confirm and show that you have identified a major opportunity/problem that you want to tackle. You need to describe in simple words what business opportunity your business will impact. You need to convey in a concise manner the background of your business idea/project and on a high level the business requirements.
Tip 2: What is the market doing?
You need to present the alternative approaches of your competitors to solve the problem you identified. You need to show three to four competitors, analyse what they are doing and with minimal use of jargon and get ready to explain why you are different from them. Remember, having many competitors is a good thing, it means there is traction! A critical analysis of the market is essential to understand how you are positioning yourself and how you intend to penetrate the market.
Tip 3: Why is your start-up better?
It is essential that you demonstrate the values and benefits of your projects. We suggest you make a clear comparison with your closest competitors and show that you have thought of all aspects on how to win over them. It is also very important that you quantify the benefits. It is essential to include here the costs (including investment appraisal) and the risk assessments. If you are operating in the innovation field, you can include technical aspects, but please remember to use a consistent style, make your proposal readable to non-experts.
Tip 4: How? Implementation
In order to convince anyone giving you money or simply joining your cause you need to show that your business case is solid! You need to have a clear business model and you need to show that you have thought of all aspects from A to Z. Create an implementation plan, with detailing on how to achieve the business objective, the resources needed at each stage, as well who will be accountable for each milestone. The most important part of the implementation strategy in a business case is that you have a clear vision for the future, also on how to mitigate potential risks.
Tip 5: Organisation
In order to complete your business case successfully you need to show that you have a team. In reality, if you know who needs to deliver a specific task you are able to tackle any sorts of issues that may rise during the project development phase. The role and responsibilities of your team members as well as the structure of your project management is a true key to success. You need to explain that you have a team and a project governance framework in place that will support the project at each stage. This will also reflect in your risk mitigation strategy and support your decision-making in real life when potential problems or delays may occur. If you are a start-up and your team is small, that is not a problem, but it is essential that you are aware of who you miss in your team or advisory board, and that you have a clear plan to expand your team.
EIC Accelerator insights
In the past months we at Catalyze have learned a lot about the new EIC Accelerator proposal procedure. What is clear from the questions that the EIC program is asking to the applicants is that they want companies who have a strong, solid foundation. They ask very detailed questions about the go to market strategy. What they seek from the candidates is for them to show a very detailed plan. This shows that the companies have a strategy to tackle all the uncertainty and difficulties in building a successful business!
We hope that these 5 tips will help you to build a strong business case and ultimately, find funding! To receive further support to ensure you reach your potential, contact us today.
This article was written by Viviana Mucci, Ph.D, Life Sciences Consultant at Catalyze.