Derry 2.0 - Five steps to raising your first £20k

Most new business ideas needs some money to help really get them off the ground. Even if you’re planning on ‘bootstrapping’ your project, being able to free up some time to work on it often means having a little cash set aside. Luckily, if you’re looking for a little startup cash - and have a good idea - both public and private sector organisations are working at ways of helping you out.

If you have a digital project, based in Derry, you can get seed funding from Digital Derry’s Culture Tech Fund (up to £5k), the Creative Industries Innovation Fund (up to £10k), SeedComp (top prize is £15k) and IGNTN (a private investment fund opening for applications in April/May).

There’s also support available through InvestNI and the eSynergy Proof of Concept fund. And that’s not even mentioning individual investors that you can speak to, often facilitated by projects like Halo. Each and every one of those is available to you within the first six months of 2012.

If you’re interested is raising seed funding for your project, that’s great, but don’t expect it to fall into your lap. There are plenty of other people who want it too, so you need to position yourself to ensure you’re top of the pile when it comes to crunchtime. Here are five simple things that you can do in the next few months to do just that.

1. Refine Your Idea: Plenty of people come to me with a loose idea of what they want to do. Almost without fail I ask them to do the same thing, put that idea down on paper in two pages max. If you can’t explain your idea simply, you have little chance of convincing anyone to give you money to start it. Two pages helps enforce clarity and is a good starting point to refine even further, testing your assumptions and getting useful feedback.

You may find that there are already solutions in the marketplace that do what you want to do - how will you differ? You may find other people have tried to do what you’re doing - how will you avoid their pitfalls?

There may even be other people right on your doorstep, working in the same arena, that you could work with. In short, get your idea down on paper and start getting feedback and refining.

2. Be Clear About Your Ask: Another common problem is not knowing what you need. Once you have refined your idea, the next step is to create a simple roadmap of how you will develop it. What’s the next step? Do you need to build a prototype? Do you need to find someone to build it for you? Do you need to free up 2-3 months to build it yourself? Be specific about what the next step is and what you need to do to get you there. If the issue is money, be explicit about how much you need and how you will spend it. If you’re not clear about this simple question, nobody will give you a penny.

3. Get Your Team Together: It’s rare that one person will have all the skills necessary to start a successful new business. You may be the creative one, in which case you’ll need technical people and business people around you. You may have a great idea but lack specific industry knowledge. Again, be clear about the skills you need to attract to your project to move it forward. If the skills are central to your project then find ways to attract those skills permanently (hiring staff or finding a partner). If they are not, go find out how much it will cost to buy them in, and who the best people are.

4. Start Selling: You’ll never know if it’s a good idea until someone, somewhere is happy to give you some money to do what you do. Contrary to popular belief there is absolutely no reason that you can’t start selling your idea to potential users/customers/trade partners etc.... well before you’ve ever built it. Getting interest from customers and early users is not only a good way of proving your idea has merit but also a perfect way to demonstrate this to would-be funders or investors.

5. Start Building: Everything I’ve said above notwithstanding, it is perfectly possible to start making real inroads into building your project well before you raise any money. Even if you’re not technical, you can pull in favours, do deals, work a part-time job or run up your credit cards to get something started. If you can get a decent demo or prototype built, your chances of getting funding will go through the roof. And even if you don’t raise any, you’re already on your way.

The final piece of advice I have for anyone keen to get a new idea off the ground is to actually apply. Take advantage of the funding that is available to you. Submit the application. And if you don’t get it, apply to the next one. And the next.

If you don’t you really have no-one to blame but yourself. And in reality, it’s pretty good proof you were never that serious about it in the first place.

Mark Nagurski is Derry’s Digital Champion, based at the Londonderry Chamber of Commerce. You can contact him by email to digitalderry@gmail.com or by visiting www.digitalderry.org