Funding and Investment for Creative Entrepreneurs Part 1

Exploring your Funding and Investment Options

Image Courtesy of Digital Catapult

In this blog, we will explore your options for funding and investment in your creative, innovative or digital business. You might be pleasantly surprised that the outlook is good. There is a wide range of startup business support available and plenty of ways you can raise funds for innovative services and products.


Advantage Creative was recently commissioned by Digital Catapult to provide advice for creative entrepreneurs on the topic of Funding & Investment.

Our Advantage Creative Fund was one of the first funds in Europe designed to invest specifically in the creative industries. Building on these foundations, we have developed a team of founders and expert advisors who have deep knowledge of the support and funding ecosystem for creative and innovative entrepreneurs. We all have one thing in common: a passion for supporting creative entrepreneurs on their route to success

We hope you enjoy these blogs, along with the accompanying suite of short films for creative entrepreneurs commissioned by Digital Catapult. You can see the first of these here:

John Holmes of Advantage Creative who teachs funding and investment for creative entrepreneurs

Digital Catapult is the UK authority on advanced digital technology. If you are working with advanced digital technologies, you should definitely check out their Futurescope Accelerator programmes.

What types of funding and investment are available for creative entrepreneurs?

There are lots of options available to you, so we’ll try to break these down and give an overview of each here. For some of the more sophisticated options, you’ll need to craft a pitch deck and investment proposal. We’ll guide you through this in parts 2 and 3 of this series of blogs.

Incubators & Accelerators

John Holmes of Advantage Creative, with a couple attending a Pitching Event at Incubators and Accelerators
John Holmes of Advantage Creative, with colleagues, pitching at a Techstars Startup Weekend.

If you’re at the early stages of building your company, one of the first things you should consider is joining an Incubator or Accelerator.

Incubators are typically for founders who are at the “idea” stage: you’re in the process of developing your full product/service offer and business model.

Accelerators are typically for founders and/or startup teams who already have a basic product and business model. Typically, you’ll already have an MPV (Minimum Viable Product) or POC (Proof of Concept).

There are there main ways an Incubator or Accelerator helps you as the founder:

a) Business Support for you (and your team) through professional development that might include master classes, seminars, and/or mentoring.

b) Peer-to-Peer Support through sharing a space or professional development programme with like-minded entrepreneurs.

c) Access to funding: Incubators often provide really helpful advice and support on applying for funding. Accelerators usually include a process of pitching to a panel of investors.

It’s worth noting here that some Accelerators will make an initial investment in exchange for equity in the company. Look out for these opportunities when you’re doing your research.

Incubators can be found all over the UK and are often managed by, or have relationships with, local Universities and/or regional Business Growth Hubs that you can find through online searches. You could start with The British Business Bank guide on Business Incubators.

You can find Accelerators by researching those that specialise in your region or in your industry sector. We suggest you check out the Beauhurst Top Accelerator Programmes for UK Businesses & Entrepreneurs for some of the very best Accelerators in the UK.

Grant Funding

Image courtesy of Grant Tree

If you have a well-developed idea for an innovative product or service that can bring value to customers, there might be grant funding to help you develop this.

Grant funding can be a really valuable part of your initial fundraising strategy as, naturally, there is no requirement to repay the funds you raise. This will only work for you, however, if you can clearly demonstrate how you meet the funders’ requirements.

So, what kinds of grant funding are available for startups, and where can you find further information?

Regional Business Growth Hubs can be a good place to start, as the business advisors there will know about regional business funding that typically supports economic growth. You could start your search on the LEP Network Growth Hub Finder.

Innovate UK provides grant funding to help businesses grow through the development and commercialisation of new products, processes, and services. Take a look at the Funding Finder page of their website.

Applying for grant funding to support innovation is quite a demanding process, and you should not approach it lightly. You might want to consider how you could improve your knowledge and capacity to develop a robust grant funding application. You could, for example, ask for support from colleagues in your network who have done this successfully. You might also consider developing a partnership with a University to benefit from their knowledge and experience in applying for R&D grant funding.

Other Consultancies

There are also consultancies that offer professional services to help you identify and apply for innovation and business growth funding, such as Gratify; Grant Tree; and TBAT.

Founders of innovative high-growth potential and scaling businesses might be eligible for support from the network of innovation and growth specialists at Innovate UK EDGE.

Friends and Family

 Image Courtesy of Business Insider

If you have people in your life who are willing to support you in your new startup, this could be a win-win situation. 

Your friends and family are already personally invested in your life and your success. They already know, like and trust you – so this can be a really good place to start your fundraising. 

Often, their motivation for investing in your start-up is to support you in doing something you love. Their expectations of the return on their investment will be more flexible than that of a bank or professional investor. In some cases, they might view themselves as investing in your personal growth and development as a Founder, and they are likely to be very flexible and supportive. 

You can structure friends and family investments as a loan. Alternatively, you could structure it as a seed investment. This means that you provide a small number of shares in your company in return for the initial investment. 

A seed investment would require some legal expertise to help you set up a simple legal agreement that defines the terms of the investment. Compared to a loan, a seed investment carries more risk for your investor and more complexity for you as the Founder. However, it can be a great place for you to build your skills and experience in equity funding. Seed Legals is a great place for Founders to start learning more about this. They have lots of really helpful resources and guides.

A loan is the most common and straightforward way to structure this investment in the UK. We always recommend that you discuss and agree on the rate of interest (or whether the loan is interest-free). Also, agree the repayment arrangements for the initial advance and the interest, and write this in a simple loan agreement. There are a number of different websites that provide free templates for simple loan agreements, such as Rocket Lawyer.

Possible risks

One of the important risks for you to consider is damage to your personal relationships if your repayments to investors run into difficulty. We always recommend that you’re completely upfront and clear with them about the possible risks – they should be understanding and supportive! Also, put your agreement in writing.  

In our experience, Founders sometimes reject this strategy because they might feel embarrassed about asking their closest friends and family for investment. Our advice is that you should swallow your pride and hide any embarrassment. Raising investment is an important part of growing a business. Try to think of a friends and family round of investment as a safe and supportive environment to start this journey. 

Sometimes, Founders tell us their closest contacts are not wealthy enough to invest. If you feel you can’t raise a large investment from your immediate friends and family, consider this: could you raise small investments from a large number of friends and family in your network? 

If so, you might have great foundations for a crowdfunding campaign….

A group of three women sitting round a table, collaborate on a document.
Image courtesy of

Crowd Funding

Here we break down crowdfunding into five different types according to the style of campaign that you choose to run: reward; subscription; donation; debt; and equity. 

We’ll give a brief overview here. If you feel you’d like to learn more, we have a series of short films about Crowdfunding for Creatives with full details, top tips, and case studies on our YouTube Channel.

There are also some crowdfunding sites designed specifically for artists and creatives, such as Unbound for authors and artistShare for musicians. It’s always worth doing your research to find the right platform for you: one that you feel really fits with your brand.

Is reward crowdfunding right for me?

Reward crowdfunding can be especially helpful for you if you are launching a new product or service. If you choose an “All-Or-Nothing” model, you can test the market before committing to costs by seeking advance orders from potential customers.

Funders make cash pledges in return for rewards. Rewards don’t have to be substantial – in fact, most campaigns have a wide range of rewards ranging from a simple “thank you” for a few pounds right up to hundreds or even thousands of pounds for personalised or premium products. 

For this kind of campaign, Crowdfunder is the most established platform, but there are others too. 

Is subscription crowdfunding right for me?

Subscription crowdfunding is especially helpful for creative entrepreneurs who are regularly creating digital content. This approach enables you to build long-term relationships with your fans and followers by providing access to content for a small subscription fee. 

You can build your subscriber base by providing access to (typically) digital content such as online magazines, newsletters, blogs, vlogs, podcasts, music or film releases, behind-the-scenes footage, training tutorials, and other content.

One of the main platforms that support this type of fundraising is Patreon, but there are some others also.

Is donation crowdfunding right for me?

Donation crowdfunding might be right for you if you have a charitable project or cause and you feel that a large number of people will support this with a donation. Naturally, it is helpful if you already have a significant audience that you can tap into. Creators don’t have to provide rewards, but some platforms do provide a rewards option. 

The main platforms for this kind of crowdfunding are JustGiving and GoFundMe.

Is debt crowdfunding right for me?

Debt crowdfunding is best suited to established businesses that can demonstrate a track record of profitability. This gives your investors confidence in the repayment of the debt. 

It typically involves a pool of investors lending money to a company in exchange for a debt that pays fixed-term returns and interest. You might consider this as an alternative to other types of loan funding.

CROWD2FUND is one of the more established platforms for this kind of fundraising. 

Is equity crowdfunding right for me?

Equity crowdfunding might be right for you if you want your most valued customers to feel like “part of the family” by giving them the opportunity to become a shareholder in your company. 

It allows investors to contribute money to a business in exchange for shares. You might consider this if you’re interested in raising equity capital, including Angel and/or Venture Capital (VC) investment. 

One of the most established platforms for equity crowdfunding is SEEDRS, although there are others also.

Loan Funding

A person sitting at a table with a computer and a phone contemplating offers of funding and investment
Image Courtesy of Virgin Money

There are advantages to loans:

  • Firstly, You can pay them back over a number of years.
  • Secondly, You can pay them off early if your idea takes off.
  • Thirdly, You can apply for more if you keep up repayments.

However, there are disadvantages. One of the main disadvantages of loan finance for a startup is that they are relatively inflexible. You will be committed to making regular repayments from the outset. This might be difficult for you until you establish steady revenues. 

Start-Up Loans, backed by the British Business Bank, are designed to meet the needs of startup companies: they do not demand security against your assets; they are designed for companies that have been trading for up to 36 months; and companies can borrow up to £25,000 at competitive interest rates. 

Once you establish your business with steady and reliable revenue streams, you might consider a business loan. You can choose whether from a High Street Bank, loan crowdfunding (see above), or even factoring. Factoring is where your business sells its accounts receivable (invoices) to a third party (called a factor) at a discount. 

Equity Funding

Two men smiling and leaning against a wall having just recieved crowdfunding and investment
Image courtesy of UKBAA

Equity funding is one of the most sophisticated forms of funding. We’ll give an overview here and go into this in more depth in future blogs. 

If you’re a sole trader, or run a Company Limited by Guarantee, CIC or Charity, this will not be suitable for you. Equity funding is suitable for a Company Limited by shares, as you raise capital through the sale of shares.

Start-ups with a focus on massive growth and rapid scaling, often by virtue of harnessing the power of digital technology, are the target business for equity investors.

The first “rounds” of equity funding are typically known as pre-seed or seed funding. The goal of pre-seed funding is to demonstrate that your product fulfills a market need. In contrast, the seed round is raised for the purpose of proving product-market fit. Quite often, this funding is raised before the company is earning money from its activities (i.e. “pre-revenue”). 

Three sources of equity funding most commonly considered are Equity Crowdfunding (described above), Angel Investment and Venture Capital (VC) investment. However, they are not exclusive, and you can use them in conjunction with each other or in series. 

Business Angels

Business Angels invest in companies, often at a very early stage. They use a relatively small amount of their own personal wealth. They sometimes take a fairly significant shareholding. This reflects both the risk they are taking and their role as a partner in building the business.

Often, Business Angels invest as part of a syndicate (a group of Angels). Business Angels typically invest between £10,000 and £50,000; Angel Syndicates can pool investments for larger raises.

So, where might you find an Angel Network?

There is a wide range of Angel Networks across the UK covering different geographical areas and industry sectors. You can find them quite easily with a google search. They will often have a member of the team who leads on introducing Founders to investors through their platform and/or pitching events. In the first instance, you might reach out to them by email or phone to learn more about these opportunities.

Also, the UK Business Angels Association (UKBAA) has guides and resources for entrepreneurs including one on “where to find investors” making a good starting point for further research.

VC funding

VCs invest in startups using funds raised by limited partners such as pension funds, endowments, and high-net-worth individuals. They also bring a significant amount of knowledge and experience to the companies they invest in. 

VCs usually have specific criteria for the sectors (or “verticals”) they invest in. These criteria include the maturity of the company and the capital they invest (‘cheque size”). Investment rounds led by VCs in the UK can be up to around £1m (pre-seed) to £2m (seed).

So, where do you start looking for VC investors?

The good news is that it is very easy to do your initial research online. VCs have their own websites, where they give a lot of detail on the verticals they invest in, their typical cheque size, and how to contact them directly. You can also find listings of UK VCs online, such as this one at Seed Legals.

Also, VCs often have relationships with Accelerators and attend pitching events, so look out for those that cover your sector and area. We’ll cover finding and approaching Business Angels and VCs in more detail in the next blog.

Production Funding

MY SMASH MEDIA have great resources to help you pitch for Production Funding

Production Funding is a common method of funding for specific theatre, film, or other content-heavy productions that require significant up-front investment. 

This can work for you if you want to raise investment, but you want this ring-fenced to the specific production. (As opposed to your production company).

Commonly, the production company forms a limited company for theatre or film production. This special-purpose vehicle (SPV) ensures the ring-fencing of the investment to the production.

Production funding can be structured as grant, loan or equity funding, with the same principles applying as those we describe above. 

If you’re a film-maker, check out the Video Collective blog on UK Film Funding Sources here. If you work in theatre, Stage & Studio have a blog on raising theatre production funding here.

Creating and sharing your pitch to investors can be challenging. We recommend you check out the resources at MY SMASH MEDIA that can help you craft and share a great pitch.


We hope this first blog has given you an overview of some of the funding and investment options for your creative enterprise.

As you can see, there are a great many options available to you. The type of funding that is most appropriate for you will vary. You’ll need to consider the sector you operate in, the maturity of your company, and your appetite for risk.

We look forward to providing you with a more in-depth description of the funding environment for creative entrepreneurs in the next instalments of this blog.

In the meantime, if you want further advice, you’re welcome to contact us at