Sometimes, we have seen entrepreneurs want to either create their own internal development team or outsource to a local development company. While the standard of development available from both these approaches can be much higher than the majority of offshore development companies, such an approach increases the risk to the business not only because of the costs involved but also because outsourced agencies will never guarantee a dedicated team which is vital to a start-up at this phase. When we apply that level of risk across the number of investments we make, it becomes an even higher risk for us personally.
As a result to mitigate some of the risk that we take by investing at this stage, we propose leveraging a Digital Agency which we own and have our share holdings in it. There are a number of benefits to this. First, we have worked with a number of previous start-ups very successfully and offer a development process geared specifically around needs of start-ups as well as give this venture its own dedicated development team making sure we retain knowledge and expertise. Second, the quality of the delivery and work is amongst the best in the industry (the majority of the work we do is for other software houses across the UK, US and IND). Thirdly, we provide discounted rate, much lower than the market hourly rates, which is obviously beneficial in terms of keeping the cost as low as possible during this phase. Fourthly, we never need to worry about a slight increase in scope as we normally just get it completed within the budget we have. Finally, taking this approach means that we do not need to utilise SEIS which will benefit any venture as we can leverage that later on at the next/interim round of investment should we need to – making the next round of investment easier to achieve.
Within the proposition, we’d also arrange for ongoing support for a year on an as needed basis on the same discounted terms as set out in the financial breakdown.