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Financing a graduate start up

It’s finance week on Bdaily and we are looking at the landscape of funding and investment, from both sides of the table. Bdaily went behind the business with Uni Car Ads, a new start up which has already made ripples in the business community. We spoke to founders and directors, Charlie Warburg and Will Clowes, to find out how they financed the business.

Please introduce yourself and your business.

Hello my name is Charlie Warburg and in February Will Clowes and I started Uni Car Ads Limited. It’s a simple idea. We place adverts on the doors and bonnets of students cars and in return they receive a monthly fee. These cars are parked along the busiest walking routes in and out of universities. Taking advantage of the concentrated areas that students live in.

Our clients include Domino’s Pizza, Accenture, IKEA, Wilkinson, Target Jobs, Pizza Express and many local businesses. Uni Car Ads is currently running in Newcastle, Edinburgh, Durham, Leeds, Nottingham, Manchester and Sheffield with plans to continue expanding rapidly.

What options did you consider when trying to raise finance for your business?

We are very lucky with the business model as we could begin trading straight away and there was little capital expenditure. Rise Up at Newcastle University gave us £500 in grants, allowing us to register the business and get business insurance and pay for our first cars.We knew if we could organically grow the business quickly we would not need any capital. We where lucky in the fact we had savings to support ourselves, 8 months down the line Uni Car Ads supports us, just!

We raised over £15,000 though grants and prize money. When we purchased anything large we took 40% grants. At the same time we are producing revenue to pay ourselves with. This meant that we didn’t have to give equity in the business or pay interest on money we’d raised.

Who did you go to first, and did you come up against any setbacks?

We went to the University and secured the grant from Rise Up. With limited savings I spoke to my family and asked if they could assist for a while with living costs. Being two single 24-year olds you do not need much to live off.

What was the most important consideration for you when you looked for finance?

Some of the things we thought about were: Do we actually need the money? What are we going to spend it on? We needed £10,000 to create a CRM system and website. Why give away 10% for £10,000 or pay interest on a loan, when you can enter a competition win £5,000 and the get 40% funding from the EU investment for growth fund? These were the most important considerations for us.

How did you find out about grants and prizes?

The University told us about the Santander University competition. Once we heard about one people told us about more and we search the web for more.Radfan, another Newcastle University startup, introduced us to Paul from investment for growth who helped us find Grants.We get so much information from the two of them we can simply pick and choose what we enter.

Our advice would be, don’t enter too many competitions, as they will distract you from the business. We only entered Blue Print and The Santander Entrepreneurship Awards. Importantly these competitions make you write a business plan and think though your idea, as well as give you credibility. At the end of the day, however, I would much rather sign a big client than win a competion.

Finally, what advice would you give to a similar business when pitching to gain finance?

Only get finance if you need it – unless its free finance of course. We don’t want to give away shares to simply raise money unless we really have to. We would much rather give away shares to someone or something that is going to bring value to the business and help us grow organically.

This was posted in Bdaily's Members' News section by Uni Car Ads Limited .