The UK is one of the top places in the world for venture-backed startups, says Richard Harris from Okappy.

43 per cent of all Europeans Unicorns (startups with a £1billion plus valuation) are based in the UK. London has the leading FinTech Hub and, in 2015, UK tech investment alone reached $3.6 billion, a 70 per cent rise compared to the previous year (see Tech City UK). With all this money sloshing around, there doesn’t seem to be a better time to raise funds for your business.

However, for all the hype surrounding unicorn companies raising finance at massively inflated valuations, finding investment for most businesses is still incredibly difficult. With so much competing advice on how to raise money for your business, how do you know where to start? How do you know what is the best route for raising money?

As we're currently raising money ourselves, (check out our pitch on AngelsDen) I thought it worthwhile sharing our experience and highlighting what has and hasn’t worked for us.

Consider different types of investment.

Often, when talking about investment, blogs and newspapers will only cover one particular form of finance even though nowadays there are lots of different options available.

Examine what type of investments are available and think carefully about which one will work best for your company. Do you want flexibility, in which case an overdraft or credit card finance might be best, or do you want growth capital?

As a growing, but early stage company, loans were not an option for us as they typically need to be secured on assets. Even where loans are unsecured (and again there are a lot more options available nowadays such as Funding Circle), they are calculated on a multiple of revenue which means the amount of capital available to us would have been too small.

Other options could include invoice finance (or factoring) but as with loans, if your turnover is relatively small and/or concentrated on a few customers, this route is either going to be closed or insignificant.

There are lots of different grants available from local bodies, the UK Government and from Europe, although perhaps for not much longer. In our experience, applying for grants is both time consuming and requires a certain knowledge of the system in order to present your application in the right light.

One thing that worked for us was offering different payment plans to our long-standing customers. By paying a year in advance, customers benefit from a substantial discount on their monthly subscription and we secure a cheaper form of finance.

We were also able to raise money through HM Revenue and Customs Research and Development (R&D) tax credits. If your business is making a profit and employs less than 250 people, you can get a 175 per cent deduction on qualifying expenditure. Even if you’re not profitable, you can still get 24 per cent of your spend back as a cash payment.

However, we still wanted to raise more capital to invest in the next stage of growth. Therefore, equity investment was our chosen route. We wanted to bring in additional expertise and advice from investors and potentially get them to open doors for us.

Once we chose the route, what is the best advice to ensure a successful fundraise?

Spend money to accumulate money

In a recent report by YFM Equity Partners, “Bringing in Expert advice” was one of the top response for how CEOs would approach things differently the next time they raise capital. Advisors can open doors, help structure your pitch and provide opportunities to put your pitch in front of the right investors. It is worth investing in advice. We also found it worthwhile spending money on promoting our fundraise. We created profiles on a number of different investment platforms and invested in PR. This helped generate interest and brought people to our investment page.

Using a reputable platform might be more expensive (although the majority of the fees are success-based) but it adds credibility and draws interest from its existing pool of investors.

Cast the net wide

Review your network and cast the net wide. Consider friends, family and even customers as a potential route to funding. Don’t be afraid to ask for money or introductions. We found that people are always interested to hear about what we are doing. Growing a business, especially one which has massive potential, is exciting and it is something that a lot of people dream of but not many actually achieve. Talking about investment and our growth plans is inspiring. We often found that, even if people can’t invest themselves, they know others that might and they were more than willing to help spread the word.

Self promotion

Keeping potential investors up to date, spreading the word on social media and pitching at events are all vital factors when raising money. The more people you speak to, the more you get your name out there, the better your chances to get investment.

Often, different forms of promotion are linked together. We presented at events such as the Business Show and the London Business School China Business Forum. We met potential investors and got good feedback for our pitch. It also led to other opportunities to promote Okappy and our fundraise. We received tweets and retweets from the event organisers and from other presenters at the shows.

As we said before, don’t be afraid to ask. We found that investors actually like the fact that you are out there, you’re ambitious and are pushing to get the investment in. At the end of the day, investors are investing in you as the management team rather than a product or idea. They want to know you have what it takes to close the deal as this will lead to more sales, more investment in the future and a higher chance of making a success of your business.

Keep communicating

It’s important to keep communicating and sharing what you’re doing. We published a blog page and kept it up to date with our latest progress. We also sent out a newsletter to both our customers and potential investors where we talked about what we were doing and provided information on the status of our raise.

The email newsletter was particularly useful as it helped us build a sense of momentum that, in our experience, is critical.

Build and show momentum

People are social beings, we are influenced by other people and what they are doing. By showing people getting involved and by highlighting momentum around our investment round, we were able to convince others, who may have been wavering, into signing up.

The more momentum built, the more we saw interest increasing. This allowed us to be choosy about which investors we accepted and which not. It even led to a bit of a competitive environment which further helped increase interest in our platform.

Fixed time frames

One of the benefits of raising money through a platform such as AngelsDen or Seedrs, is that the amount of time your pitch is live is fixed, typically either 30, 60 or 90 days. Although daunting initially, it helps focus the mind and allows you to concentrate on the task at hand, both in terms of promoting the investment and getting potential investors to commit.

Use different forms of communication

People consume information in different ways. Some want to meet face to face, others prefer a simple email, others may want to watch a video presentation.

Publishing regular updates through different media, ensures they are going to be seen by the largest number of people. It enables more frequent promotion of your company and builds up confidence towards your fundraise.

There are many funding platforms available. Often they may be small and growing themselves. For them having a “liquid pool of investments” is important if they are going to bring more angels and professional investors onto their platform. It is often free or very cheap to create a profile which ensures you’re seen in more places and can lead traffic back to your site. Sites we used include AngelList, The Angel Investment Network and and F6S.

Ask questions

Investors, especially VCs, like to stack the cards in their favour and paint a picture of limited availability of finance. They will only take warm referrals and make companies jump through hoops to get their foot in the door. That being said, remember it’s not just about you selling your vision to them. They need to sell the benefits of their cash to you too. There is more and more competition so the days of VCs having a monopoly over the source of finance for small businesses are long gone.

If you are speaking to VCs or Angels, ask them what makes them special, what do they bring to the table over and above cash, how do they work and if they provide references.

Ultimately, they are also competing with other finance providers to “sell” their investment. They need to generate revenues and invest in the best companies so be confident, make them work for your time and ensure it is the right fit for your business.

I hope our experience can prove beneficial to you. Our investment round closes 31st May 2017 so check out our investment page to find out more or see how we did.

Good luck to you as well in closing your own investment rounds.