As the Womenpreneur Initiative aims to equip women with skills to access investment among others, in this article we aim to provide you with an overview of the main methods to raising funds for your business project.
Why start a business in Belgium?
Belgium is a great location for starting a business due to its geographical location, its excellent investment possibilities and its favourable business environment. Last year, Ernst & Young ranked the country in the top five of most attractive European countries for foreign investments. So, if you are thinking of an idea for a business project, it is time to get moving!
From seed to growth: Understanding the start-up financing stages
In the past decade, there has been a surge in start-up funding opportunities in Belgium which have been brought by new alternative ways of financing. From seed to growth, knowing the stages of financing your business project is key in order to attract the right means at the right time!
At the earliest stage, when you have an idea for an entrepreneurial project, there is the opportunity of receiving pre-seed capital which entails three main sources of finance: FFF (fools, friends and family), business angels and accelerators. Business angels refer to former business founders who often use their own capital and are willing to take a big risk. The European Business Angels Networks is one of the largest networks on the Continent and it also operates in Belgium. Visit their website and get more information! Accelerators are programmes that you can apply to and where you can be provided both with mentorship, capital and sometimes even office space for your business project. In Belgium, you can for example apply to the Imec.istart programme that supports tech start-ups or the KBC Start It that is open to everyone who is dedicated and open-minded!
When you have reached the second stage, you have reached a point where capital is necessary to start a company to which there are two modes of financing: crowdfunding and syndicate investing. The crowdfunding market has evolved substantially in Belgium. It is considered an alternative investment method, as you, essentially, gather funding through small sums from a large number of people typically via the internet. There are many types of crowdfunding. One of the leading crowdfunding sites in Belgium is Spreads that is a peer-to-peer lending platform, allowing investors to be repaid with interest. The second method of financing, syndicate investment, is the idea of letting angel investors to co-invest with each other which allows them to run the investment in early stage-startups. It can usually foster more investment in the company.
Once your business is established and you have gathered consistent revenues, you have reached the growth capital stage which allows you to proceed to the A, B and C funding rounds. This procedure means that you are expanding your business through outside investment. Not going into detail, the important thing to remember is that all investments made during these rounds are arranged such that the investor keeps partial ownership of the company. In Belgium, venture capital funds like Liberty Global or LRM invest heavily in small and medium-sized companies where there are high-return opportunities.
Keep faith in your business project to build resilience
It can feel quite overwhelming when you are searching for investment among the many options, but remind yourself that if you have a great business idea, follow it through and don’t give up. This advice was given at one of our recent events in the GenerationW programme 2021 edition. Lena Hoffmann and her colleague Kyra Dresen from ASIF Ventures that supports student start-ups presented concrete tips on how to manage funding for your business. Here, Lena said that:
“Reality can be disappointing but you must keep faith in your project and keep working on it. Sometimes something works because you have tried millions of times. So, keep faith in the project you have in mind. Because it is through resilience that your project will progressively take shape in reality.”
You can read our blog post about Lena here.
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The Womenpreneur Initiative has launched the second edition of the GenerationW program: GenerationW2021. This time supported by the U.S. embassy in Belgium and equal.brussels. Watch this short video to find out about all the info!
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