How to Raise Funds for Your Startup's Next Stage of Growth.
Remember, there is always cash available, the question is what price are you willing to pay.
Growing your startup is an exciting journey, but taking the leap from bootstrapped beginnings to the next level often requires more capital than your savings or modest revenues can provide. I'm going to look at an example of an FMCG business in the UK in this article, because each industry and each country has it's own funding options, and include a custom GPT that you can use to help you find cash.
"60% of UK startups fail within their first three years, with lack of access to funding being one of the leading causes” - Bath University.
Listen to a mini pod about funding for your business.
If you have already invested your own money and are generating revenue, you’re bootstrapping. This keeps you in control, but growth may be limited by how much capital you can personally inject[1].
Fortunately, the UK offers several funding options tailored to your stage, sector, and ambition.
Funding Options for Short Term Expansion
The client
The best source of money is always the client. It's the lowest cost source of money as it doesn't require giving up equity nor will it carry interest. It may however carry a discount to the price that you want to charge; as you may be in a position to discount your invoice to get advance payment.
One option that I've used is to invoice the client a percentage of the total invoice, say the fixed costs of production, and the balance after delivery.
Friends and Family
Often, the first external money comes from those who know and trust you. If you go this route, be transparent about risks, set terms in writing, and clarify whether the funds are a loan or an investment. Protect both your relationships and your business[2].
Angel Investors
Angel investors are experienced individuals—often former entrepreneurs—who invest in early-stage companies. For FMCG businesses, angels are a strong option, especially when your revenue is still modest but your growth potential is obvious. UK angels often invest via tax-efficient SEIS or EIS schemes, and many offer industry expertise alongside funds[3][4]. You can find them on platforms like Seedlegals.
- How much? Typically from £10,000 up to £1m (often as part of a syndicate or together with co-investors).
- How to access? Through networks like the UK Business Angels Association or regional angel syndicates.
- Benefits: Mentorship, sector experience, connections, patient capital.
- Considerations: You give up a portion of equity.
Tip: For food and drink, consider approaching investors already active in FMCG. Some are listed by platforms and reports focused on the food and beverage space[5][6].
Crowdfunding
The FMCG sector performs well on UK crowdfunding platforms: tangible products make it easy for consumers to invest, often becoming brand advocates. Platforms like Republic and Crowdcube have high campaign success rates for food and drink startups[7][8][9].
- Models: Equity crowdfunding (investors buy shares), or rewards-based (preorders or perks).
- How much? From a few thousand to several million pounds, but most successful FMCG rounds fall between £50,000 and £500,000.
- Benefits: Publicity, direct feedback, builds a community of early supporters.
- Considerations: Platform fees apply, campaigns require strong marketing, and you may make your financials public.
Trade Finance
If you’re fulfilling orders for retailers or exporting, trade finance can bridge the funding gap between paying suppliers and receiving payment from your customers. These facilities give you upfront working capital, enabling you to take on larger orders and expand without tying up your cash.
Options include:
- Purchase Order (PO) Finance: Lenders advance funds against confirmed orders.
- Supply Chain/Invoice Finance: Funding secured on invoices or supplier agreements.
- Export Finance: For international growth.
- How much? Typically £10,000 to £1m+.
- Terms: Short-term (30–120 days), facilities are secured on goods, orders, or invoices.
Providers: Banks, specialist trade finance firms (e.g., Ultimate Finance, TradeRiver).
Benefits: No equity dilution, quick decisions, supports scaling with large retailers[10][11][12][13].
Venture Capital (VC)
Venture capital is suitable if your FMCG brand shows exceptional growth prospects and you’re ready to give up equity (and some control). VCs expect scalable, ambitious businesses—usually those selling nationally or internationally, or with a strong D2C brand. New platforms like ThatRound are making market places for vc's and entrepreneurs to meet.
- How much? Seed rounds for FMCG in the UK range from £250,000 to £1.5m[14].
- Considerations: Rigorous process, VCs will want board seats/influence.
Revenue-Based Financing
For businesses with ongoing order flow but who wish to avoid equity dilution, revenue-based financiers lend funds repayable as a percentage of future sales. This can be ideal for FMCG brands with regular cash flow.
- How much? Typically up to several hundred thousand pounds.
- Considerations: Suits companies with predictable revenues.
Small Business Grants & Government Loans
- Start Up Loans: UK government-backed personal loans of £500–£25,000, with mentoring.
- Small Business Grants: These exist for innovation, sustainability, and growth, but are competitive and often specific to location or sector[15].
Comparing Funding Options for FMCG Startups in the UK
| Route | Typical Amount | Equity Required | Speed | Best For |
|---|---|---|---|---|
| Bootstrapping | £0 – £50k | No | N/A | Early stage, maximum control |
| Friends & Family | £1k – £100k | Sometimes | Fast | Initial/bridge funding |
| Angel Investors | £10k – £1m | Yes | Weeks-Months | Networked founders ready to scale |
| Crowdfunding | £10k – £2.5m | Often | 1–3 months | Consumer-facing FMCG, publicity boost |
| Trade Finance | £10k – £1m+ | No | Days–Weeks | Large orders/trade, bridging cashflow gap |
| Venture Capital | £250k – £5m+ | Yes | Months | High-growth, scalable operations |
| Gov. Loans/Grants | Up to £25k+ | No | Weeks–Months | Startups/new product lines/innovation |
Practical Steps for UK FMCG Founders
- Assess your funding needs: How much do you need to hit your next milestone? What will the money unlock?
- Build your pitch: Focus on traction—sales, repeat orders, customer validation. FMCG investors love consumer proof points.
- Network strategically: Engage with angel networks, crowdfunding platforms, or trade finance providers relevant to your niche.
- Keep your options open: Many successful FMCG brands layer funding types—for example, angels plus crowdfunding, or trade finance plus a startup loan.
- Plan for growth: Investors want to know not just why you need funding, but how it translates into acceleration (new listings, larger batches, export wins).
Non-Diluted Debt Funding
A novel approval is using future income against a loan. Melissa Widner, CEO of Lighter Capital, explains on The UnNoticed Entrepreneur podcast how their non-diluted and debt type of funding can help entrepreneurs grow without having to worry about the onerous part of paying the loan.
A GPT to Help You
The techie at Invenics have created a custom GPT to help find funding opportunities. This is specialist, but could help you to find a grant, which is not a source of funding listed on one of the market places for venture funds or crowdfunding.
Conclusion
Expanding your FMCG startup in the UK is challenging, but you have more funding routes than ever before, from traditional angel networks to modern trade finance.
In my view, the best source of capital is always the client. They're committed to you and you can deliver to them without giving up equity or losing margin by borrowing money. It's often better to give up some margin in order to ease cashflow. Giving up equity is the most expensive way to fund a business.
Remember, there is always cash available, the question is what price are you willing to pay. With marketplaces, specialist products, and AI it's so much easier now to fund, and to apply, for these grants; unless of course you're asking your family, in which case a better result will probably come from an offer of lunch.
Useful Resources
[1] Angel investing in Britain – a Growth Business guide - Growth Business https://growthbusiness.co.uk/angel-investing-in-britain-a-growth-business-guide-2566126/
[2] How to get startup funding in the UK | QuickBooks UK https://quickbooks.intuit.com/uk/blog/how-to-get-startup-funding-in-the-uk/
[3] £50 million Business Angel CoFund invests first £7.2 million https://www.gov.uk/government/news/50-million-business-angel-cofund-invests-first-7-2-million
[4] Angel Cofund https://www.british-business-bank.co.uk/finance-options/equity-finance/angel-cofund
[5] Top UK Food & Drink Angel Investors & VC Funds https://seedlegals.com/resources/uk-top-20-food-drink-angel-investors-vc-funds/
[6] Top 2025 Consumer Goods Investors in United Kingdom https://www.gritt.io/search-for-investors/top-consumer-goods-united-kingdom-investors/
[7] How crowdfunders are falling out of love with fmcg startups https://www.thegrocer.co.uk/analysis-and-features/how-crowdfunders-are-falling-out-of-love-with-fmcg-startups/702282.article
[8] Top 10 Crowdfunding Platforms in the UK for Startups (2023) https://accountancycloud.com/blogs/top-10-crowdfunding-platforms-in-the-uk-for-startups-2023
[9] Equity crowdfunding | British Business Bank https://www.british-business-bank.co.uk/business-guidance/guidance-articles/finance/equity-crowdfunding
[10] GB What Is Trade Finance? - A Guide for UK SMEs Looking to Scale https://www.ennessglobal.com/insights/blog/what-trade-finance-guide-uk-smes-looking-scale
[11] Ultimate Finance | Trade Finance https://ultimatefinance.co.uk/funding-solutions/working-capital/trade-finance
[12] Trade Finance - the tool to power international transactions https://www.sparkfinance.co.uk/for-businesses/business-funding-solutions/trade-finance
[13] Traderiver: Home https://www.traderiver.com
[14] Raising Your Seed Round: Food and Beverage - ThatRound https://www.thatround.com/post/raising-your-seed-round-food-and-beverage
[15] 150 UK small business grants to apply for right now https://smallbusiness.co.uk/small-business-grants-uk-2548113/
[16] Food & Beverage Business Investment Opportunities https://www.angelinvestmentnetwork.co.uk/business-proposal/industry-food-beverage-23
[17] Trade Finance https://www.bacb.co.uk/products/trade-finance
[18] Tradeteq | The Leading Platform for Trade Finance Investing https://www.tradeteq.com
[19] A Guide to Fundraising for Tech Startups https://teamsas.co.uk/tech-startup-fundraising/
[20] Most Active Angel Networks in the UK https://www.beauhurst.com/blog/top-angel-networks-uk/
