Co-investment models for digital innovation

Risk is often a key barrier when seeking to attract early stage capital. From an investor’s perspective, early stage investments represent an attractive proposition however risk can often manifest in a multitude of ways such as expertise of founders, demand for products or services and lack of capital to scale, to name just a few.

We believe collaborative investment models are a way in which to drive forward digital innovation, as they seek to lower those associated risks, increase the chance of survival of early stage businesses and also boost the likelihood of scalable commercialisation of new products and/or services.

In addition, R&D incentives can often reduce the total amount of capital required as well as assist with cash flow at a time where the new business is not generating its own income yet. So far, a number of emerging models have already been successfully tested and we believe more innovation and focus needs to be placed on this arena.

The following four options provide real alternatives to traditional financing models and are well worth considering.

Co-investment models