A Menter Môn Project
Cufflink - Finding Finance
16 March
2021
“The first question to ask yourself is, do you need funding?”
A business normally needs funding if it’s pre-revenue, is scaling up, you want to speed up time to market, creating R&D, or for short-term operations. The pre-revenue stage of Bootstrap to Seed funding is the stage where 9/10 start-ups fail – the affectionately known ‘valley of death’!
“The first stage of any business is the ideas stage.”
In this stage you’re looking at bootstrap funding, developing ideas and an initial business plan. There are a lot of funding options at this stage! Family and friends, Angels, Government, Accelerators, Crowd Funding, Private Equity or Venture Capitalists.
“I started off using my own savings, getting a co-founder, seeking support through Incubators, and competitions/grant funding.” Billy said, holding back on a large funding application at the start, as he wanted to learn more about what the company was going to be – and to convince his co-founder to join!
At the same time they put a business model together, learned how to spend (and save!) money, started confirming ideas, and put a founder’s agreement together. Billy notes this is your business pre-nuptial and choosing your business partner is as important as choosing your spouse! Importantly, Billy also spent this time finding out if there was a market for what they were trying to do.
The next stage was to apply for an Innovate UK grant – the positive being that it was zero equity funding – and Cufflink applied three times! They failed the first time, took on feedback and submitted again, and were third-time lucky. The cons of Innovate UK funding are that it’s extremely competitive. It also only funds a % stage, so you need to find match-funding.
“They give you brilliant feedback.” Billy said. “With four assessors’ feedback as well, which is so helpful. Plus, if you go for another grant, you have that template and can at least copy/paste your answers and save time. Many grant forms ask the same or similar questions.”
Other funding options, an overview:
Competitions, like ‘hacks’ and so on, tend to request equity in return. Not all, but many, will do this. However, they can be a good way to secure a quick round of funding.
Incubators and Accelerators don’t ask for equity, and there are 153 active incubators currently in the UK.
Government. This includes R&D Tax, SBRR, CIF and more. There is no equity, but they can be temporary and there is also a limit to how many people apply – they can go overnight!
Once funding was secured for Cufflink’s pre-seed stage, they were able to start employing people and writing the full business plan. This was used for the next seed round. Billy also started thinking about Intellectual Property (IP) at this point.
“Pre-Seed buys you time! Time to understand your product, route to market, perspective clients, and form a proper company.”
Seed funding was the next stage. Now based at M-SParc, Anglesey, Cufflink are pleased to announce that they have raised over £500,000, through both equity and grant based funding to help continue to develop the Cufflink solution, keeping your personal data safe. The Enterprise Hub @ M-SParc was able to offer business support in order to help secure this funding.
Led by the Development Bank of Wales and alongside their London-based Angel investors, this funding will allow them to build the Cufflink app and SaaS whilst helping to retain and build the team at M-SParc, as well as with remote staff.
This seed funding will compliment additional funding received by Innovate UK – the UK Government’s innovation agency – which was secured in collaboration with Bangor University, led by Prof. Andrew McStay and Prof. Vian Bakir, to continue research into the wider ethical issues surrounding personal information management systems.
Support was received by support companies at M-SParc, including IP Tax solutions, BIC Innovation, and Knox Commercial.
Minister for Economy and North Wales Ken Skates said:
“It’s great to see an award-winning company like Cufflink succeeding in North West Wales. They are exciting and innovative and bring high-skilled opportunities to the area. This is the sort of creativity and high-tech we hoped M-SParc would inspire in the region and I am very interested to see how they continue to develop and grow in this dynamic sector.”
Michael Bakewell of the tech venture investment team at the Development Bank of Wales said:
“Cufflink is a really exciting cyber security firm with an exceptionally promising future. As a long-term equity partner, we are delighted to be co-investing alongside Angel investors and continuing our collaborative work with Innovate UK, Bangor University and M-SParc. Our collective impact is making a real difference and we’re looking forward to supporting Cufflink on their journey.”
M-SParc CEO, Pryderi ap Rhisiart, adds:
“It’s fantastic to see Cufflink receiving both public and private support as part of their successful funding round. This is exactly the sort of innovation we want to see develop at M-SParc, creating highly skilled careers and encouraging others to innovate and venture into business. Companies like Cufflink confirm it’s possible to grow and prosper in North West Wales and we continue to see new and exciting opportunities develop in the ecosystem.”
“Y cwestiwn cyntaf i'w ofyn wrthych chi eich hun yw, ydych chi angen cyllid?”
Fel arfer, mae angen cyllid ar fusnes os yw ar gyfnod cyn-refeniw, yn datblygu, rydych chi am gyflymu’r amser cyn cyrraedd y farchnad, creu ymchwil a datblygu, neu ar gyfer weithrediadau tymor byr. Y cyfnod cyn-refeniw Cychwynnol i Sbarduno yw'r cam lle mae 9/10 o fusnesau newydd yn methu – 'dyffryn marwolaeth' fel mae’n cael ei alw!
“Cam cyntaf unrhyw fusnes yw'r cam syniadau.”
Yn ystod y cam hwn rydych chi’n edrych ar gyllid cychwynnol, datblygu syniadau a chynllun busnes cychwynnol. Mae llawer o opsiynau ariannu ar y cam hwn! Teulu a ffrindiau, Angylion, Llywodraeth, Cyflymyddion, Cyllid Torf, Ecwiti Preifat neu Fenter Cyfalafwyr.
“Dechreuais ddefnyddio fy nghynilion fy hun, cael cyd-sylfaenydd, ceisio cymorth drwy'r unedau hybu, a chystadlaethau/cyllid grant.” Meddai Billy, gan ddal yn ôl ar gais mawr am gyllid ar y dechrau, gan ei fod am ddysgu mwy am yr hyn yr oedd y cwmni'n mynd i fod – ac argyhoeddi ei gyd-sylfaenydd i ymuno!
Ar yr un pryd, fe wnaethant roi model busnes at ei gilydd, dysgu sut i wario (ac arbed!) arian, dechrau cadarnhau syniadau, a rhoi cytundeb sylfaenydd at ei gilydd. Mae Billy'n nodi bod hwn yn gyfatebol i gytundeb cyn-priodi ar gyfer eich busnes ac mae dewis eich partner busnes yr un mor bwysig â dewis eich priod! Yn bwysig, treuliodd Billy yr amser hwn hefyd yn darganfod a oedd marchnad ar gyfer yr hyn yr oeddent yn ceisio'i wneud.
Y cam nesaf oedd gwneud cais am grant Innovate UK – y peth cadarnhaol oedd mai cyllid dim ecwiti ydoedd – a gwnaeth Cufflink gais deirgwaith! Fe wnaethant fethu’r tro cyntaf, cymryd adborth a chyflwyno eto, ac roeddent yn lwcus y trydydd tro. Anfanteision cyllid Innovate UK yw ei fod yn ofnadwy o gystadleuol. Mae hefyd ond yn ariannu cam %, felly mae angen i chi ddod o hyd i arian cyfatebol.
“Maen nhw'n rhoi adborth gwych i chi.” Meddai Billy. “Gydag adborth pedwar asesydd hefyd, sydd mor ddefnyddiol. Hefyd, os byddwch yn mynd am grant arall, mae gennych chi’r templed hwnnw a gallwch o leiaf gopïo/gludo eich atebion ac arbed amser. Mae llawer o ffurflenni grant yn gofyn yr un cwestiynau neu gwestiynau tebyg.”
Opsiynau ariannu eraill, trosolwg:
Mae cystadlaethau, fel 'haciau' ac yn y blaen, yn tueddu i ofyn am ecwiti yn gyfnewid am hynny. Ni fydd pob un yn gwneud hyn, ond bydd llawer yn gwneud hyn. Fodd bynnag, gallant fod yn ffordd dda o sicrhau cylch ariannu cyflym.
Nid yw Unedau Hybu a Chyflymwyr yn gofyn am ecwiti, ac mae 153 o unedau hybu gweithredol yn y DU ar hyn o bryd.
Llywodraeth. Mae hyn yn cynnwys Treth Ymchwil a Datblygu, SBRR, CIF a mwy. Nid oes ecwiti, ond gallant fod dros dro ac mae terfyn hefyd i faint o bobl sy'n gwneud cais – gallant fynd dros nos!
Unwaith y sicrhawyd cyllid ar gyfer cam cyn-sbarduno Cufflink, roeddent yn gallu dechrau cyflogi pobl ac ysgrifennu'r cynllun busnes llawn. Defnyddiwyd hwn ar gyfer y rownd sbarduno nesaf. Dechreuodd Billy feddwl hefyd am Eiddo Deallusol (IP) ar hyn o bryd.
“Mae cyn-sbarduno yn prynu amser i chi! Amser i ddeall eich cynnyrch, llwybr at y farchnad, cleientiaid persbectif, a ffurfio cwmni priodol.”
Cyllid sbarduno oedd y cam nesaf. Bellach wedi'i leoli yn M-SParc, Ynys Môn, mae Cufflink yn falch o gyhoeddi eu bod wedi codi dros £500,000, drwy gyllid ecwiti a chyllid sy'n seiliedig ar grantiau i helpu i barhau i ddatblygu datrysiad Cufflink, gan gadw eich data personol yn ddiogel. Llwyddodd yr Hwb Menter @ M-SParc i gynnig cymorth busnes er mwyn helpu i sicrhau'r cyllid hwn.
Dan arweiniad Banc Datblygu Cymru ac ochr yn ochr â'u Hangylion buddsoddi yn Llundain, bydd yr arian hwn yn eu galluogi i adeiladu ap Cufflink a SaaS tra'n helpu i gadw ac adeiladu'r tîm yn M-SParc, yn ogystal â staff o bell.
Bydd yr arian sbarduno hwn yn ategu cyllid ychwanegol a dderbyniwyd gan Innovate UK – asiantaeth arloesi Llywodraeth y DU – a sicrhawyd mewn cydweithrediad â Phrifysgol Bangor, dan arweiniad yr Athro Andrew McStay a'r Athro Vian Bakir, i barhau i ymchwilio i'r materion moesegol ehangach sy'n ymwneud â systemau rheoli gwybodaeth personol.
Derbyniwyd cefnogaeth gan gwmnïau cymorth yn M-SParc, gan gynnwys IP Tax Solutions, BIC Innovation, a Knox Commercial.
Dywedodd Ken Skates, Gweinidog yr Economi a Gogledd Cymru:
“Mae'n wych gweld cwmni arobryn fel Cufflink yn llwyddo yng Ngogledd Orllewin Cymru. Maen nhw’n gyffrous ac yn arloesol ac yn dod â chyfleoedd sgiliau uchel i'r ardal. Dyma'r math o greadigrwydd ac uwch-dechnoleg yr oeddem yn gobeithio y byddai M-SParc yn ei ysbrydoli yn y rhanbarth ac mae gennyf ddiddordeb mawr mewn gweld sut maen nhw’n parhau i ddatblygu a thyfu yn y sector deinamig hwn.”
Dywedodd Michael Bakewell o'r tîm buddsoddi mewn menter technoleg ym Mhrifysgol Datblygu Cymru:
“Mae Cufflink yn gwmni seiberddiogelwch cyffrous iawn gyda dyfodol eithriadol o addawol. Fel partner ecwiti hirdymor, rydym yn falch iawn o fod yn cyd-fuddsoddi ochr yn ochr ag Angylion Buddsoddi a pharhau â'n gwaith cydweithredol gydag Innovate UK, Prifysgol Bangor ac M-SParc. Ein heffaith cyfunol yw gwneud gwahaniaeth go iawn ac rydym yn edrych ymlaen at gefnogi Cufflink ar eu taith.”
Ychwanegodd Prif Weithredwr M-SParc, Pryderi ap Rhisiart:
“Mae'n wych gweld Cufflink yn derbyn cymorth cyhoeddus a phreifat fel rhan o'u cylch ariannu llwyddiannus. Dyma'r union fath o arloesi yr ydym am ei weld yn datblygu yn M-SParc, gan greu gyrfaoedd medrus iawn ac annog eraill i arloesi a mentro i fusnes. Mae cwmnïau fel Cufflink yn cadarnhau ei bod yn bosibl tyfu a ffynnu yng Ngogledd Orllewin Cymru ac rydym yn parhau i weld cyfleoedd newydd a chyffrous yn datblygu yn yr ecosystem.”
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