Startups Anonymous Est. 2013 · Read-only archive
Stories

Product Market Fit, Innovative, Big Market, Insane User feedback but UK has no follow on funding, so we’re going to fold!

After working on our startup in the UK for the past two years, it looks like we’re going to have to fold.

I’m incredibly disappointed and upset that all this work will be wasted. I wouldn’t mind so much if we hadn’t ticked all the boxes…

1 – Great team – check
2 – Product Market fit – check
3 – Big Market – check
4 – New Innovate product – check
5 – Traction – great sales revenue – check
6 – Scalable business – check
7 – Great repeat customer rate – check
8 – Net contribution per unit sale – check

Following our very small initial investment round, we proved what we set out to do. We listened to all the advice from UK and USA VC’s and other entrepreneurs and built a business that is ready to scale. The model works and the business would certainly be profitable with scale.

But now as we’re months and months past the point, our runway ran out and with a new round looking less and less likely, it looks like we’re going to have to fold the business. According to people we trust, they think there is just very little follow on money in London right now. So much for Silicon Roundabout … It’s a pipe dream.

9 answers from the community

AAnonymous· Jan 29, 2014

I'm trying to make sure I say this and don't seem like some cynical ass hat. Obviously your missing some thing. If your a scalable business, scale back. If your a great team, find a way around your problems. If you have a great repeat customer rate, why aren't you making enough to survive? I guess what I'm trying to say is if your so awesome and this company has such potential, prove it. Keep on being awesome, use that large market to find more funding, use your traction to prove your a viable investment. There are other options that just straight up folding. It's hard to know what to really say with out knowing more details. If London is failing you, bail and go some where else.

AAnonymous· Jan 30, 2014

what is the innovative product? maybe it really doesn't merit a check mark?

AAnonymous· Jan 30, 2014

I am also interesting what is your innovative product?

AAnonymous· Jan 30, 2014

9 - You can generate enough revenue per user to cover the cost of acquiring users, developing the product, and running the company. - uncheck.

AAnonymous· Feb 6, 2014

You've got tunnel vision. Find a VC who will give you 15 minutes and ask them what you are doing wrong.

AAnonymous· Feb 6, 2014

If your product is good enough then you have one option left - croudfunding. See UK companies such as http://www.clearbooks.co.uk/cloudfunding and http://www.clearbooks.co.uk/cloudfunding

AAnonymous· Feb 14, 2014

I would have to agree with some of the other posts - there has never been a time in history with more options to find capital. its never going to be easy, trust me i'm looking for some more myself, but if you have such a great business, you will find a way. your three most compelling checks to me are: great revenue, repeat customers and net contribution. I'm having a hard time understanding how you can have all three of these things but be running out of money so quickly...?

Maybe you should take a closer look at your COGS or your SG&A. Are there areas that you can make more efficient and cut costs? Did you invest early in long term assets that you could sell and then lease back? What sort of office space are you using - can you reduce the size and have people work from home?

If you have a profitable business model, but just dont have the capital needed to scale as quickly as you want, then you simply need to get creative to save a little more money for a while before reinvesting that back into the company. Good luck.

AAnonymous· Feb 17, 2014

How much are you looking for? Who have you met with that has turned you down, and what reasons have they given? There's money out there and what you describe sounds solid, I'm wondering if we can help find some different stones for you to turn over.

AAnonymous· Feb 18, 2014

There is amazing tax relief available for UK businesses through SEIS/EIS programs. If you consider funding channels other then VCs/VCTs and are seeking 150K to 5M GBP this is open to you through specialized insto/retail brokers.