Cardiff has a strong business ecosystem which has always been an attractive factor for startups. According to StartupBlink, there are currently 66 startups in the city. This accounts for around 1% of the United Kingdom’s startups.
The city has seen explosive growth in the technology sector, particularly with software development and artificial intelligence (AI). It’s no surprise then that plenty of startups in these industries originate from there.
Every startup requires funding to get off the ground. It gives the company the initial boost they need for operating costs, salaries and any other expenses. It’s common for these startups to approach venture capital firms who offer investments into these businesses.
Why Do Startups Need Venture Capital Funding?
Venture capital (VC) funding provides the initial financial support to enter the market as quickly as possible.
Every startup will need a significant amount of capital when navigating the early stages of their development, and most won’t have this capital available on-hand.
In comparison to traditional bank loans, VC firms can also offer strategic advice in the form of mentorship to new entrepreneurs. For those looking to learn, it’s a great way to do so.
Coupled with their financial banking and industry expertise, VC firms are the cornerstone for startup growth acceleration.
How Does Venture Capital Differ From Private Equity?
VC and private equity (PE) are both types of investments, but they do have some differences that set them apart.
VC firms invest primarily in startups who are still in the beginning stages of their operations. The reason for these investments that could be seen as risky if the startups don’t make it, is that they show potential for high growth especially in niche markets.
Venture capitalists will provide the funding in exchange for equity in the business, and usually exit after a period of time.
On the other hand, PE firms will invest in companies who have been operating for some time. They invest more money into established companies than VC firms would invest in startups. The goal is to restructure the business in such a way to allow for a potential. sale in the future.
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7 Cardiff VCs Investing In Early Stage Startups
The city is home to a few venture capital firms who offer funding to startups in their infancy. For these businesses, securing the right funding will be crucial to their growth.
1. Gambit Corporate Finance
The Gambit Corporate Finance team has more than 30 years of experience in raising funds for startups across the UK, North America, Western Europe and Asia Pacific. They assist with every stage of a venture’s lifecycle, from preparing financial forecasts and visibility assessments to managing negotiations with investors and assisting legal teams with contractual documentation.
2. Mayfair Ventures
Mayfair Ventures offers funding for startups in the cybersecurity, fintech and AI industries to accelerate their business growth.
The firm has their own cyber practice, which means they are better equipped to identify areas of concern within the industry, and support the startups who address those concerns.
3. Westbridge
WestBridge has up to £200 million of capital to invest in startups with a focus on B2B. Their investment sizes range from £10 million to £40 million to UK-based startups.
Collectively, the firm’s team has more than 100 years’ experience with investments.
4. Innovation Investment Capital
Innovation Investment Capital offers funding between £2 and £7 million per deal to high-growth companies in the tech sector. These startups are required to be located in, or planning to expand to, one of the ten local authority areas within the Cardiff Capital Region.
5. LDC
Since its inception, LDC has generated £217 million with 14 total investments and 6 exits. For more than 40 years, the firm has offered funding to startups across the healthcare, ICT, media and tech industries to name a few.
Their enterprise value of investments is currently sitting at half a billion pounds.
6. IQEQ
IQEQ acts as the fund administrator, combining technology, compliance and technical expertise to manage the funding lifecycle.
The firm understands that investors expect more transparency when it comes to fees, reporting and valuations, which they deliver through the use of leading technology and industry talent.
7. Waterspring Ventures
Waterspring Ventures is committed to providing funding to early-stage companies based in the United Kingdom who have the potential to create highly skilled jobs with high productivity.
The firm has achieved exits of £400 million and advise on more than £150 million worth of transactions every year. Their investments amount are currently between £100,000 and £500,000 to EIS-eligible businesses.
