Watch this video for an overview of ways to finance your business, which is also useful for any innovation you would like funded.
What is innovation?
Innovation does not just mean inventing something new. It also means adapting new technologies. Or applying new methods to improve your product or service. There are many ways to innovate within your business. For example, you can improve your product or service with a small technical or practical adjustment. Or you can renew your production process, saving money and energy.
Preparing your financing proposal
Before you look for funding for your idea, check if anyone else has already come up with the same idea. Maybe a patent or other intellectual property right already protects the idea or the innovation. Then you may not copy it without the creator's permission.
Make a prototype or write a plan
If the idea is new, you can develop it into a prototype or proof of concept, to demonstrate thefeasibility of your idea. You can do this, for example, with the lean startup method. Or in a FabLab (Fabrication Laboratory, in Dutch), a public digital workplace. A prototype shows potential investors how your idea works and how it can make money.
If you want to apply for a subsidy or loan, the lender will need information. They will ask you about your business and/or project. Present them with a business or project plan that contains a financial plan.
Check innovation subsidies and tax benefits
The government has funds available for your innovation. This can be in the form of a subsidy, a loan, or a tax benefit. With this money, you can further your research or develop your idea.
Here are some examples:
- The Proof-of-concept funding (VVF). With this loan, you can investigate whether your idea is technically feasible and suitable for the market.
- The Innovation credit scheme is for the development of new products, processes, or services with a strong chance of success. This loan is risk-bearing. This means that you only pay back the loan if the development is successful.
- The WBSO is a tax scheme that allows you to lower your Research & Development (R&D) costs.
- If you use the WBSO, you can also use the Innovation box. This means you pay less corporate tax on the profit you made with your innovative activities.
Check all innovation subsidies and see which ones are of interest to you.
Subsidies for digital innovation and cybersecurity
Are you developing new products and services in the field of digitisation or cybersecurity? View the overview of subsidies, schemes, and support (in Dutch) from the Netherlands Enterprise Agency (RVO). Or contact dcypher, the cybersecurity collaboration platform.
Find an investor
You can also look for an investor who wants to put money into your product or service. This could be, for example, a Venture Capital fund or a Regional Development Agency.
There are also private investors, such as Business Angels. They mainly invest in innovative starters and entrepreneurs in the early growth phase of their company. Such an investment is often a loan or investment in shares.
Convince investors with a pitch
Often investors will ask you to present your idea and yourself. With a short but powerful pitch you can show why your product or service is an interesting investment. This increases your chances of entering into a conversation with an investor.
What are investors looking for?
Investors and Business Angels pay attention to these points, among others:
- Is your company in the startup or growth phase?
- Is your idea innovative and sufficiently distinctive?
- Can your company make a lot of profit within a few years?
- Is your company located in a region that is of interest to investors?
Another way of financing is crowdfunding. You raise money for your idea from the general public, the crowd. You get funding from the crowd via a platform. That is a website where you promote your idea and ask for funding. Through crowdfunding, you can increase your brand awareness and make contact with future customers.
Earn money with licences
Have you protected your idea with an intellectual property right, such as a patent? Then you can give someone else permission to make or sell the product for a fee. That permission is called a licence. You can earn money selling such a licence.
Call in advice on financing
It is not always easy to ask for or receive financing. An adviser can help you with this. There are several organisations (in Dutch) that have good advisers available.