Trends for technology businesses seeking investment in 2021
Karen Holden, CEO of A City Law Firm recently spoke to Business Leader about the current trends within the UK tech sector for businesses looking to secure investment.
Despite the pandemic global investment into technology businesses continue to boom , especially in the areas of healthcare, education, facilitating remote working and sustainability. Here are the 2021 investment trends we’ve seen and what is in store:
Virtual fundraising events
Fundraising events remain key for tech businesses to engage with potential investors, build networks and forms an essential element in growing business relationships.
Due to Covid these have shifted to virtual from the traditional in-person events. Tech companies have adapted to meet the ‘new normal’ leading to an explosion in virtual events.
These online formats allow people to attend from the comfort of their own home, allowing attendees to overcome geographical limitations. They give founders the chance to promote their business, through presentations and networking. This often means they can actually attend more events than if in person, especially with travelling elements cut out they save both time and money. They also get to engage speakers, sponsors, and supporters who otherwise may have been unable to join.
Ethical and sustainable investing
With sustainability issues at the fore more money than ever has been flowing into tech businesses that focus on environmental, social and corporate governance.
Many experienced investors are fearing that the economic fallout could happen again. The renewed interest in corporate responsibility ; and cost effective solutions will help new tech businesses speed up the integration into traditional corporations , that might have been years away from the actions they are now taking.
It is paramount organisations do not fall behind on digital presence, from their website, to posting regularly on social media channels. It’s important to stay on top of the latest updates and algorithms to optimise content and reach.
Businesses embracing digital marketing are thriving in this space. It is important to note that companies still need to do this within the parameters of Financial Promotion restrictions and ensure they adhere to Data Protection regulations and governance.
Data Protection & Cyber-security has attracted a lot of attention with fines and new legislation, so companies need to keep abreast of their own compliance as well as assisting its end users.
Ecommerce has been further accelerated and robust terms, GDPR and insurances are ever more essential for a thriving online business to stay ahead of the curve. If you have no online arm, but provide products this will be a serious area of weakness in most tech business plans.
Use of online crowdfunding platforms to find investment opportunities are on the rise. Crowdfunding is most often used by start-up companies or growing businesses as a way of accessing alternative funds. It is an innovative way of sourcing funding for new projects, businesses or ideas.
It can also be a way of cultivating a community around your offering. By using the power of the online community, you can also gain useful market insights and access to new customers.
The new landscape for tech companies will require them to be nimble. Companies will continue to find new avenues and approaches to meet the economic and logistical demands of COVID-19. The climate will remain uncertain. Therefore, the best way to account for uncertainty is versatility and being ready to adapt.
We hope that 2021 continues to be a boom year for investments into technology businesses. As we look ahead, it is important they also keep on top off emerging trends to keep pace with the ever-changing landscape.