For long-term growth, SMEs need to maximise investor value  

Today, securing business finance is a short-term, practical process; SMEs choose their preferred way to raise funds, apply, and – if successful – receive resources.   

However, this moment is just one small snapshot of a much bigger picture. A company’s need for financial support never ends, even if the amount they need to borrow/raise and why evolves. And in the current model, SMEs often need to start from scratch whenever they want to apply for further business funding.  

WeOwn is helping small businesses to change this approach, using our digital marketplace to build long-term investor relationships. We want to discuss how a technology-driven model makes future finance applications easier, by maximising investor value.  

Proactive, not reactive   

One of the major challenges with current business finance models is that they are based on reactivity, not proactivity. Often, SME leaders don’t start applying for a new loan or funding round until they’ve exhausted current resources, and don’t have the capital to finance their next venture.  

By focussing on strategy first, fundraising second, companies find applying for finance interrupts momentum and slows growth. Scaling an SME becomes very stop/start, as decision makers need to work out how much additional capital they need to fund the next stage in their development plan, and make a new application to secure further backing.  

Building long-term investor relationships can help to solve this problem, as it creates a ready-made pool of people who believe in a business, and who can see first-hand the benefits of offering support. And if SMEs raise private finance through WeOwn, we can help them to nurture those relationships – and anticipate when they will next need support. 

Efficient, effective results for everyone 

Fintech platforms like WeOwn are well suited to helping SMEs secure financial support, because we focus on simple to access, flexible finance opportunities.  

Rather than relying on a network of intermediaries, WeOwn connects businesses directly with investors through our digital marketplace. These investors actively want to take an equity stake in a business, or offer a peer-to-peer loan, on terms that work for them as an individual or institution.  

Enabling direct interaction between SMEs and investors puts the focus on creating a ‘business case’ for finance, rather than ticking the box on a standard application form. This makes our approach better suited to building ongoing relationships, because we empower efficient, effective financial support that drives results for everyone involved.  

Moving to a predictive model  

In addition to a tailored application process, our technology-first approach generates a wealth of valuable dataSMEs can use these insights to understand both their own business needs and their investor relationships, to make the acquisition of further funding run smoother.  

Data analytics will empower company leaders to understand when they are likely to need more capital, so they can make early investor outreach before reaching a critical cash flow point. This moves further away from the traditional ‘one size fits all’ fundraising model, to a predictive approach. 

As the WeOwn platform is technology-led, in the future we will be able to use predictive modelling to intelligently analyse business/investor relationships, anticipating how frequently SMEs are likely to require financial support, and identifying the best-fit investors to fulfil their requirements.  

Connecting with the right investors 

Understanding long-term finance needs and building consistent investor relationships will have a transformative impact on SME growth. Instead of adhering to a rigid borrowing structure, business leaders will be able to seek flexible finance opportunities through digital finance platforms like WeOwn, to continually assess what funding they require, how much they need, and when they will need it.  

More importantly, the data being generated through digital marketplaces will help SMEs to get a head-start on warming up potential investors. Every business user will have instant, online access to previous and current investor information, which they can use to nurture leads. 

WeOwn has created the platform capability to strengthen relationships through built-in investor analytics and communication tools. Our users can identify their strongest supporters, so they spend less time chasing dead end leads, and more time lining up the right resources to continue their growth trajectory.   

Our approach takes a huge leap forward from the current homogenous bank loan model, and we’re only seeing the tip of the iceberg. The faster the alternative finance market grows, the quicker SMEs will move away from going to investors ‘cap in hand’ when their kitty is almost empty. Instead, they will anticipate future financial needs, and line up the next round of funding without having to take their foot off the accelerator pedal. 

Join the WeOwn platform for a quicker, easier digital route to SME finance 
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