Grant funding and other financial assistance schemes available for U.K. creative start-ups
As in any other sector, start-ups in the creative sector usually find that the biggest challenge is securing enough finance to get off the ground. You can’t attract investors, licensees and customers without a product, the team to develop it and the intellectual property to protect it but these things all cost money and that means securing investment.
Even without this chicken and egg dilemma, each type of funding comes with its drawbacks. Crowd funding or investment from friends and family can result in piecemeal shareholdings that deter future investors. Venture capitalists will want control. Bank loans mean you have to pay the money back with interest and the bank may want security. Who wants to lose their house over that idea they had for a cartoon?
For these reasons, “soft money” in the form of grant funding and industry specific loan schemes are welcome alternatives, particularly at the early stage. Here are some of the main schemes available in this regard (and, obviously, this list is only accurate at the time of publication and may evolve in the future):
See https://www.gov.uk/government/news/50-million-of-government-investment-announced-for-creative-businesses-across-the-uk for the government’s new investment initiative. This provides that:
- £18 million funding will support creative businesses outside of London as they create new economic opportunities in their areas
- £21 million will go into three-year UK Global Screen Fund to promote UK films internationally
- £8 million will help entrepreneurial, start-up video game developers from across the UK create new games
Creative Scale Up Programme:
This will build on the success of the Creative Scale Up pilot. The pilot was a two year, DCMS-funded £4 million investment programme, which supported over 200 creative businesses across three English Combined Authority regions (West of England, West Midlands and Greater Manchester).
The programme was announced in December 2018 as part of the Creative Industries Sector Deal. It provided intensive business support to growth-stage creative businesses, to support them to grow and to access finance. It is also designed to improve the capacity of relevant investor communities by identifying and engaging local angel investors and matching them to a pipeline of high-growth businesses.
Creative Industries Sector Vision:
The creative industries were identified as one of four key sectors in the Plan for Growth to encourage recovery following the pandemic and have been invited to develop a Sector Vision
The Sector Vision, due to be published in this summer, will set out a long-term strategy focused on promoting growth within a sector and delivering on the government’s levelling up, Global Britain and net zero objectives. This strategy will be developed as a partnership between government and industry. The Creative Industries Council will be the government’s primary partner to deliver the Sector Vision.
We are creative - https://www.wearecreative.uk/investment/
- This provides expert resources and financial opportunities that are tailor made for the Creative Industries, offering bespoke investments, access to funding, loans, and growth mentoring.
- It also provides start-up loans and schemes for creative entrepreneurs
- The scheme offers loans of up to £25,000 to creative entrepreneurs in the UK
- It is designed to improve access to financing for the creative industries
- More information can be found at creativeengland.co.uk/investment/start-up-loans
Further guidance can be found at https://creativeconomy.britishcouncil.org/guide/new-funding-and-business-models/.
All this is obviously very welcome but potential applicants need to be aware of the following points:
- There is a lot of competition for each grant and filling the application in can be time-consuming so make sure you qualify in the first place and fill the form in properly.
- You can’t just do whatever you like with the money. Loans can be called in and grant funding halted and clawed back if the conditions are breached so read those conditions carefully.
- Some grants require you to match the funding. Will you be able to do so?
- Some grants are only available to a collaboration consortium and you will therefore need to negotiate and agree a collaboration agreement. Pick your partners carefully since, if you fall out, the project could grind to a halt and the money and effort will have been wasted. You will also need to agree on how the results generated under the project (whether they be creative content, software or hardware) will be owned and commercialised and how exploitation revenue will be allocated. Some funding providers require such a plan to be in place as a condition of their providing the money. Even if they don’t, it is preferable not to just kick the can down the road and only start thinking about such things on the eve of launch or publication.
So it’s great that all these schemes are available but don’t forget to read the small print and it’s always advisable to take legal advice on the funding terms and ancillary contracts before you sign on the dotted line.