By Jos White , Co-founder of Notion Capital

Startups and entrepreneurs may be operating in trying times, but they should take solace in the fact that if they have survived one of the harshest economic climates in recent years, they are offering investors an opportunity to be part of a strong and resilient business.

With any business, cash injection is usually essential for achieving the next stage in your company’s growth, be it market expansion, research & development or recruitment. Knowing where to look for funding isn’t always straightforward but it can be easier than you think.

Here are the top three best sources of funding for start up, seed or early stage investment. The suitability of each of the following depends very much on the lifecycle of your company, and, as with anything, a certain amount of homework is required:

1. Friends & families: It may be obvious, but friends and family is still one of the best tried and tested routes for the very young companies that require a relatively small investment of upfront capital to kick-start their business.

2. Angels / early stage investment: Although some angels are willing to invest at the ‘idea’ stage, the majority of these investors will require you to have some customers, figures on the cost of running your business and a solid business strategy. But how to attract them?

 Network, network, network: a fantastic way of getting a foot in the door with the angel / early stage VC community is through networking. Building a strong network with like-minded entrepreneurs and relevant industry people, will prove highly valuable in terms of opening doors.

 In the meantime, you can approach some the many angel clubs around the UK, and Europe, such as the London Business School (LBS) angel investor network, Cambridge Angels or Seedcamp.

3. Institutional money - VC or government guaranteed debt: Suited to more mature early stage businesses that have a sizeable customer base and concrete knowledge of how much it costs to run the business. These companies will have a more developed understanding of their market and can demonstrate their competitiveness, resilience and growth strategy in this space. With this insight the business can more easily justify the amount of funding it is asking for.

 Identify the relevant early stage institutional investors for your industry sector and approach them directly or with an advisor. Try to look for VC’s that have experience of your market and can add value beyond the financial investment. As before — networking can prove your greatest friend; use your little black book and take advantage of the contacts you’ve built.

 Look at a combination of small company loans, debt factoring (selling your invoices to a third party that will process them and enable you to draw funds against the money owed to your business), and availability of development grants via the likes of Business Link.

Given that the process of applying and securing government funding is often complicated, competitive and time-involved, along with the current scarcity of bank lending, businesses should focus primarily on VC support whilst riding out the wave of the recession.

Always remember that routes two and three will always take longer than you think. Allow, at the very least, three to six months and don’t be afraid of utilising that time to strengthen your business strategy and network.