Entrepreneurs heading up small businesses and startups know alltoo well the vital role that funding plays in their venture’ssuccess. According to the National Small Business Association,one in four small businesses can’t get the funding they need,while just 1% of startups receive investment capital.
(And yes, small businesses and startups differ. The former tends to focus on the locale they’re in, while the latter focuses on scalefrom the get-go.)
Ciaran Burke, co-founder and COO of Swoop, gets it. BeforeSwoop, he founded Hiive (think LinkedIn for creatives), so he’s no stranger to financing travails. In fact, his latest venture is allabout it.
Swoop helps both small businesses and startups discover fundingopportunities that go beyond VCs, loans, and grants. Founded in2018, Swoop already boasts 100,000 registered users, a staff of 100, and offices in the UK, Ireland, Australia, Canada, and the US. This global exposure, as well as his own experience, providsBurke with hard-earned insights into the fiscal challenges thatbusinesses worldwide face regularly. It’s worth hearing what hehas to say about the most common financial roadblocksentrepreneurs encounter — and what can be done to move pastthem.
Starting out
Building the Hiive platform (now called ScreenSkills) offered aproving ground of sorts for the Irish entrepreneur.
“That was my first introduction to assembling an engineeringteam and building a product from scratch, launching it, getting customers, and building a community around it,” says Burke. “As it took off, I started looking at growing the business further through equity finance.
“It was at that time that I met my Swoop co-founder and CEO,Andrea Reynolds. We had similar career paths, but she had a lotmore experience with corporate finance and helped pull togetherhigh-end investors.”
As Reynolds explained how to attract that kind of capital, itbecame clear to both that many business owners couldn’t easily access such information. There was a real need for what wouldeventually become Swoop.
“The idea for the platform came at exactly the right time, as therewere many useful trends that we could take advantage of, likesharing open data (such as open banking), connecting to publicsources like business registers, and connecting to accountancysoftware,” says
Burke. “This allows us to sense-check what an SME’s financialposition is and then check for finance eligibility against a largerange of products hosted on one system.”
Although each area and jurisdiction has its own challenges,Burke notes that there are universal business truths that affect allsmall businesses and startups.
Universal truth #1: Identifying potentialfunding sources is rough
“Traditionally, when your business needed funding, you would go to your bank manager, and they would tell you of the two or threeproducts they offer,” says Burke. “If you weren’t eligible, you had to change your finances, do some things differently, and then go back again.”
“Now the space is much more exciting with the big increase inalternative lending, such as investments, grants, VC firms, andprivate financing. But all these options can be daunting to business owners [without] a financial background. They aren’t well placed to identify which products are right for their business,how to pick the best one, and how to best apply the finance.”
Business owners need these details explained to them but Googlesearches only get them so far. Often, they turn to theiraccountants, who are probably not experts on the various forms offunding or how to access them.
Indeed, because Swoop fields so many queries from accountants versus entrepreneurs, Burke created a product thatwould allow accountants to add their clients onto the platform.
Universal truth #2: Economies aren’tpredictable
The adage holds true for economies: The only constant is change.Bear markets become bull markets become bear markets again,with business financing often reflective of that volatility. Manybusiness owners discovered this first hand during the COVID-19pandemic.
“First, the business shutdowns caused a mad rush to accessgovernment-backed funding,” says Burke. “Then, the openingand closing window periods meant that businesses had tonavigate demand spikes and troughs. This prompted manybusinesses to direct finances into e-commerce to make up for theshortfall in physical customers. Now, as the world emerges fromthe pandemic, businesses can look forward to better opportunitiesfor asset- backed lending and lower borrowing rates.”
Business owners face an almost impossible task. Notonly must they find the right financing sources, theyalso have to find the right one at the right time.
Universal truth #3: Entrepreneurs don’talways know if they qualify for afinancial product
“One of the greatest frustrations for business owners isfiguring out whether they’re even eligible for aparticular funding product.”
“Business owners are bombarded with marketing for financialproducts, only to find out that they’re not a good fit,” says Burke.“Many finance providers come across as really open to invest inall businesses when in fact they’re looking for ideal slivers. It’stherefore important to help businesses identify exactly whichsliver they fit into and who the providers are in that space.”
As entrepreneurs better understand how eligibility works, theyalso gain new perspectives on their own businesses. That’s whyBurke finds the educational aspect critical.
“As we explain concepts such as merchant cash advances anddouble Dutch to our clients, they get a better understanding of allthe different financing solutions,” he says. “Through their productunderstanding, they become much more comfortable decidingwhat solutions would be beneficial to the business and whatwouldn’t.”
Universal truth #4: Financial applicationsare painful
Finance applications are no picnic in the park. They’re typicallylengthy and repetitive, with the same questions posed to applicants over and over. Most business owners are alreadyexceptionally busy, and onerous funding applications come at thecost of other parts of the business.
“Sense-checking for eligibility and simplifying theapplication process are the two biggest pain pointsglobally.”
“We’re looking at a number of solutions to streamline the applications process, including integrating publicly available data to pre-populate application documents [and] to createdocuments they can use for multiple applications,” says Burke.
Constant improvement
Knowing your customers — what motivates them, their painpoints, how they define success
— is a business truism. So, as an entrepreneur who’s launched twocompanies, Burke has an insider’s feel for the financial hurdlesthat can overwhelm first-time founders and small business owners.
At the same time, Burke, Reynolds, and the Swoop team experience the very same forces that their clients feel applied tothem. Just as their customers and prospects are navigating
shifting markets, so too is Swoop learning which services andproducts best support entrepreneurs.
“We want to empower our clients with information,” says Burke.“They’re the ones pulling the levers, but we provide the tools toplay out scenarios. The more control they have, the more blind spots disappear. This will naturally make them better leaders and better co- workers. They can take their knowledge to their ownteams, which has a positive effect on the entire business.”