How it is easy to get funding for technology startups
June 25, 2012 | by techlineinfo.com
Many people who want to enter the technology markets find it very hard to acquire the needed funding because most financial institution considers them risky. This is also further added by the fact that such technologies have not performed well hence the returns might be minimal which might lead to failure to refund the money borrowed. So many technological enthusiasts will find the funding from closer friends and family members. Now the funding from friends and family has their own advantages because first, they can be easily found, their terms of repayments might suit the borrower and finally, it is possible to form the company.
In order to succeed in any technological investment and get the necessary funding, then it is recommended that anyone wishing to enter the technology world get some help from the reputable companies. One of the funding schemes that provide the best startup capital is the Enterprise Investment Schemes (EIS).
The Enterprise Investment Schemes (EIS) is a plan to provide the necessary funds to the small companies that are in the early developmental stages. This involves looking for capital to push them into the market and compete favorably with others. Higher risk companies, like those in technology where investors lack an interest, can now fully get the necessary funding. These businesses are also considered small hence getting the start up capital brings more problems.
How it works
The Enterprise Investment Schemes (EIS) is applicable to companies by allowing them to get tax reliefs in various capital plans. This is translated into those companies who want to start up on the newest technologies. In order to qualify for such advantages, any new investor must own shares or equally have a stake not more than 70% on the business. These are just simple rules that allow one to have the necessary funding.
What makes people who lack startup funding get the Enterprise Investment Schemes (EIS)
Many people who want to start a technology company, at first will get funding problems because of the nature of the problems faced. So the only option available for the company is the Enterprise Investment Schemes (EIS). The scheme makes it simple as the requirements needed are be satisfied easily. Since it is a small company, then they lack the money to boost the investment. With the requirements set at 7 million pound it becomes easy to fund the technology. Also the starting company must work alone without being aided by another company which is a requirement. Since they are starting up on the business then there are high chances that their tax requirements will be met. During the initial time of looking for the funds, the small technology company is not listed in the stock market hence easy to get the technology funding. The greatest advantage of using an Enterprise Investment Schemes (EIS) is that the technology company will get additional advices on how to properly invest and get the returns. There are many experts who are capable of advising the individual on what to do. Finding the startup capital for the business technology companies might be the hardest task, but with plans like the Enterprise Investment Schemes (EIS), one can get the best tax reliefs to enable them grow in business when it is in the early stages of developments.