[00:00:00] Lucas: Welcome to the building and growing podcast today. We've got James Campbell with us here to talk about the Walmer Group, also, he has a fantastic shirt choice.
[00:00:12] James: Got the uniform memo mate, thanks for that!
[00:00:14] Lucas: You're most welcome, James and welcome again. Do you wanna start off by just telling us a little bit about yourself, an Aussie founder here in London?
[00:00:23] James: Sure.,Yeah, thanks for having me. I've been over in the UK for about five and a half years, a fantastic place to live and a fantastic place to do business. We launched the Walmer Group March last year but it had been in planning for about 12 to 18 months prior to that.
[00:00:41] James: I'm from a sales and business development background, I worked for a private investment platform back in Australia for a number of years working with startups and scale ups on the fundraising side. Moved to the UK and I've worked with and within, different tech startups and scale ups over the last five years or so. My business partner is from more of an innovation funding background, so R&D tax grants and other forms of funding that are available to startups and scale ups and companies in the UK. We launched the business with this idea of building out a one stop shop for innovation funding. What we found in our different roles that we'd worked in over the years is that funding can be a very fragmented process, and for a lot of startups and scale ups, it can be quite a daunting process in terms of firstly identifying what they do and don't qualify for. Then finding the time to be able to go and identify and find that and then also working out if they qualify or not. So the idea behind the business has always been to build out this one stop shop, where we can service companies in a number of different facets and capacities.
[00:01:52] Lucas: Okay, fantastic. So do you mind telling the audience a bit about what that journey would look like for a startup, when they're assessing different funding options and what criteria are associated with them?
[00:02:09] James: Sure, so we focused our attention for the first year and a bit of the business with R&D tax and grants.
[00:02:17] James: So in terms of those two forms of funding, R&D tax is available to any company that effectively carries out research and development related activities or qualifying activities. Grants are available to companies that want to carry out and be funded for a project that they're going to undertake.
[00:02:35] James: So in terms of what qualifies, it's quite a broad spectrum in terms of companies, we work with companies from the technology and software industry, we work with biotechs and life science companies and then at the end of the spectrum, we work with construction and engineering companies and sustainability companies.
[00:02:56] James: It is quite a broad spectrum in terms of different sectors that do qualify for these forms of funding. In terms of what companies should look for, obviously in an ideal world, they come and speak to a specialist consultancy like ourselves but there's a lot of information online for them that's readily available in terms of them being able to do their own research and do diligence to work out what they qualify for. Obviously our door is always open if, if people want to come and have a conversation about what they may or may not qualify for.
[00:03:25] Lucas: I saw on LinkedIn that some of the rules are changing from the 1st of April 2023. Do you wanna talk a little bit about what those changes are and what actions companies could potentially take?
[00:03:50] James: HMRC has been enacting these changes for quite some time now, because this scheme has been abused quite significantly and so the main one that startups and scale up particularly wanna look out for is that from April next year, subcontracting costs that are accrued overseas will no longer be allowed to be claimed for R&D tax relief. So companies that we work with and come across, and a lot of companies in the market in general often have a lot of their development team overseas or, outsource a lot of work overseas so they have to be cautious that from April next year, they won't be able to include a lot of that activity in their R&D tax claim.
[00:04:32] James: There are certain qualifying activities and certain instances where companies will be allowed to continue to carry that out, but that's the main one to consider. Other changes that are being enacted are things like additional information being required in the claim, which most good R&D tax consultancies that I'm aware of do already. For companies that do it themselves, or might use their accountant or have done quite basic reports or tax claims in the past, it's gonna be extremely important for them to start to be more detailed in what they're including in their R&D tax claim and it just means that HMRC is doing stronger due diligence in terms of what qualifies as R&D tax relief.
[00:05:17] Lucas: Very clear takeaways if some of your R&D tax claim involves overseas contractors, then you almost need to have, let's say a business continuity plan from April next year, assuming that those overseas fees are not going to be eligible for tax credits.
[00:05:43] Lucas: Then secondly, look at your current process of how you're documenting these expenses, challenge perhaps your accountant on how they're documenting it, because the burden of information might increase.
[00:05:59] James: Yeah, exactly right and like I said, good R&D tax consultancies that exist in the market, and there are a lot of really good ones, they do do a high level of detail in terms of what goes into the technical report, which is a high level overview of the technical activities that a company is undertaken. So a lot of that already exists in the marketplace, but obviously HMRC is gonna be cracking down on companies that don't show that now.
[00:06:26] James: It's not to say that you won't be able to get claims through, but there's gonna be a higher level of precaution taken by HMRC, which means the chances of an inquiry into that are probably increasing.
[00:06:40] James: So we've explored the R&D tax credit proposition, what else
[00:06:46] Lucas: is on the roadmap and how is that evolving particularly now in this difficult economic environment?
[00:06:53] James: Yeah, absolutely. So one product that we've just completed our first trial loan for, and we're about to softly start to launch, is an R&D advanced lending product. We've spent 12 months with our lending partner developing that product to where it is, we've done our trial oan and now the idea is to start to softly launch, to lending against our own R&D tax consultancy work and then gradually build that product out with referral partnerships, with accountants and other practices that work with startups and scale ups and other businesses.
[00:07:30] James: What that involves is that it allows companies to receive their funds within days, rather than weeks or months of submitting an R&D tax claim. So the way our process works is we've designed a risk assessment process that scores the company based on the quality of the R&D work and obviously the credit worthiness and there's other stuff that goes into the process.
[00:07:50] James: Then that gives the company a loan to value ratio, which is what we'll lend them against, so as an example, if their R&D claim was £100,000 and their LTV came to 75%, we would lend the company £75,000 pounds within days of them submitting their R&D claim. So that, that frees up cash flow, which can typically take weeks or often months for them to come back from HMRC.
[00:08:16] Lucas: Okay, wow so in the current economic period, I think that that's very important to know because working capital is extremely important. So previously it would take weeks or months, whereas now through this innovative loan product, you're able to offer it in days.
[00:08:35] James: Use an example of what's happened in the last month or so, HMRC has been doing investigations into fraudulent activity in the R&D tax scheme and what's happened is that that's meant a lot of manual processes in terms of investigating R&D tax claims, which has meant that often companies are seeing huge delays in getting R&D tax benefit back, and a lot of companies will often price in the R&D benefit into their cash flow forecasts in the knowledge that they may receive it in six to eight weeks. If it's taking 12 to 16 weeks for that money to come back, then it can often have an impact on the business's cash flow, so this product has been designed to effectively support businesses through that. So it may be that companies have priced in their cash flow, or it may be having the money come in within days rather than waiting months allows them to hire that Chief Technology Officer or the new sales person, or spend the extra £50,000 on product development.
[00:09:37] James: We're soft launching that now and then the idea will be to go live and a harder launch towards the end of the year.
[00:09:45] Lucas: So the R&D tax loan is available for companies here in the UK through the Walmer Group. I suppose that's one way of companies alleviating some cash flow issues at the present moment, we're seeing venture capitalists sort of turn off the taps, funding is drying up a little bit. What innovative options for funding are out there for startups and small businesses?
[00:10:19] James: Obviously what we talked about in terms of R&D tax, there are a lot of companies in the UK that either still don't claim or may not optimize their claim, so that's probably one. There's a lot of different grants that are available at the moment, the UK has been very strong in pushing the innovation agenda over the last six months, obviously that means that a lot of these grants have become a lot more competitive as well but there are hundreds, if not thousands of different grants that are available at all different times, in in the UK at any time. One as an example at the moment that opened last week and closes next week is a fast grant from Innovate UK, it allows smaller micro businesses that are building technology in towards net zero or in healthcare to receive a grant of up to £50,000 and so it's just quite a short window. So there's grants that are available as well and then from a funding standpoint, you're right - the VCs it seems, put their hands under their back sides for a bit for now but still there's a lot of dry powder that still exists out there in the market.
[00:11:22] James: If you look at the past 12 to 24 months, a lot of the big fund managers have raised or big VCs have raised significant funds where that capital hasn't yet been deployed. I think from conversations that I've had with VCs, it's meant that the great companies are still going to get funded, the maybes that would've got funded last year probably won't get funded this year and for founders that fit into that category, it just means that extra effort of pounding the pavement to identify other forms of investment that they could be looking for through angel networks, through other VCs.
[00:11:58] James: It's just made the, work a little bit harder for them, but I guess what we saw in 2021 was a very frivolous market and raising money was very, very easy. 2022 is gonna be a harder slog but I guess it's a bit of a reality check and a bit of a correction in terms of where the market was to where it probably should be.
[00:12:19] James: My advice to founders out there and those that are looking for funding, is to look outside pure investment and look at other alternative options as well through R&D tax through grants, through other alternative forms of finance as well.
[00:12:32] Lucas: So that's extremely important for founders to know that there are other options out there, certainly grants are something that aren't perhaps spoken about enough, R&D tax credits as well, I hardly hear it get spoken about however I know that, you know they do happen in the backgrounds yeah. So during this economic period, how are you helping companies to navigate the difficulties that they might be encountering?
[00:13:12] James: I think again going back to the R&D tax narrative, it's an incentive that's available to a lot of businesses in the UK and there's a common misconception often around R&D tax that because it's called a tax credit or tax relief. A lot of companies think that they have to be profitable and be paying tax to actually receive the benefit, whereas loss making companies are eligible to receive an R&D tax benefit as well. The way that that comes is that they can actually surrender their losses and they can receive the money back as a cash injection into the business. So that's one way where companies if they are looking for alternative forms of funding and they're a loss making business, they can go down that path and they're able to get some cash into the business.
[00:13:59] James: The other advantage of that is that it puts them in good stead when they approach an investor; one knowing that they might have received some cash back from HMRC, and two that they can show that their tax affairs are in order. So a good example is we work with some referral partners who are investors on the R&D tax side, I've had investors come to us before who have been looking at companies and have said you should go and speak to them and see if they're doing their R&D tax relief, and if they're not, obviously we'll engage with them. Then that gives an investor a good idea about what their tax affairs look like because if HMRC has paid them back some sort of benefit, then obviously it gives them a bit of a tick in the box to say that someone's had had a look in terms of oversight of what they're doing from a financial standpoint. The expenditure standpoint in terms of other avenues, from a fundraising standpoint, at the moment it's harder but there's still money out there and the right deal is always there for the right investor. It's just gonna take a bit more extra work and I guess from that standpoint, my advice to founders or my recommendation to founders would be just keep pushing. It's gonna be harder, but just keep pushing it and keep knocking on doors.
[00:15:15] Lucas: Sometimes it is a numbers game after all and the more work they do, the more it will pay off.
[00:15:24] James: Yeah and I went to a SAS event last night software as a service event last night and spoke to a few, few VCs and their outlook was quite similar. It was like we're sitting on our hands waiting to see effectively what happens going through summer when obviously people in this part of the world start going on holidays and leave the office and whatnot. A couple that I spoke to last night were under the impression that when September comes around that will give them a bit more of a clearer indication in terms of what the outlook is for the rest of the year and that may be when they start to deploy more capital. Like I said, there are thousands and one of the beauties of doing business in the UK is there's a lot of money here and the ecosystem is set up to support investors with tax reliefs through SEIS and EIS and things like that. There are investors out there, again, it's just putting in the hard yards to identify and find where they are.
[00:16:21] Lucas: Fantastic and you've mentioned that you've got some strategic partnerships with investors, are there any other partners that you work with?
[00:16:31] James: Yeah, absolutely. Accountants are great referral partners for us, because what's happening in the accounting industry at the moment is a lot of smaller accountancy practices have had clients for a long period of time. Those clients are now coming to them and saying, can we do an R&D tax relief claim? Or can you help us in that capacity? Often we find some accountants will either go and employ R&D specialists and bring them in-house or they'll look to outsource that work to a specialist consultancy like ourselves, so accountants are often our best friends. We work with a few fund managers in terms of VCs, we work with some angel networks who are great. So one of them I'll give him a shout out, Chris Low, I've known Chris nine or ten years, he runs a great angel network working with a lot of startups and scale ups on the fundraising side. So partners like that are great for us because obviously we can refer business their way in the sense of companies that may fit his scope from a fundraising standpoint and then vice versa, if he's working with startups and scale ups that haven't done their R&D tax claim, or they may want a second opinion, or they're looking for additional service, then obviously it's an easy route. So I'd say from a partnership standpoint, we love working with accountants. We love working with angel networks and these sort of guys and also we work with some private individuals as well who may sit on the board of 6, 7, 8 different companies and they're fantastic as well.
[00:18:06] James: So James we've covered a lot of ground today, if there are three takeaways from an innovation funding perspective for founders and business owners and startups, what would they be?
[00:18:20] James: I think number one, using the R&D side of things is make sure you are aware of the legislation changes that are coming. Whether you're doing your claim yourself or through your accountant, make sure you know what's happening in terms of those changes. If you're using a specialist consultant, make sure they're telling you what's happening with those changes, because like you said earlier, there are some decisions that probably have to be made for companies that outsource activities overseas and this sort of thing.
[00:18:51] James: Number two, I would say again from the R&D side of things, make sure you have your house in order before submitting an R&D claim. Make sure that the technical report that you are producing, that's being submitted to HMRC is technical in nature and explains what you do at a high level so that someone inside HMRC can understand that and can justify why they're about to pay you back a benefit.
[00:19:17] James: Number three, I would say to founders, keep pushing in terms of there's a lot of doom and gloom that you can read on LinkedIn and through the media and on social media and whatnot. I would say from a funding standpoint, just keep bashing down the door, keep hustling and keep pushing for funding and always remember the beauty about 2022 is that there are so many alternative different forms of funding available to you.
[00:19:45] James: I met a guy at the event last night who is doing an invoice financing business. There's a guy that sits in the office next to us in Hammersmith who does all sorts of alternative lending and then we are building something like an R&D lending product that will allow a company to cash flow their business within days, rather than waiting the typical months or weeks or months that it can take for HMRC to pay back the benefit.
[00:20:09] James: So never get disheartened in the fact that you may not be able to raise the investment that you're looking for, there are other forms of funding available and on the investment side, just keep pushing.
[00:20:20] Lucas: Fantastic. James, thanks so much for joining us today. Anything you'd like to add to close off with?
[00:20:27] James: Like I said, I kind of tied it off with a nice little finish there but if companies want to find out more about these alternative forms of funding, so through the R&D lending product, if they want a second opinion about their existing or new R&D claim, or if they just wanna discuss anything government funding, R&D grants, then get in touch with us.
[00:20:50] James: My door's always open, I love meeting founders because even if we don't end up doing business, it's a new connection and you learn a lot about what they're doing which is some really cool, innovative stuff happening in the UK at the moment.
[00:21:02] Lucas: Well more than happy to send anyone who needs it your way, and no doubt anybody that sees you tagged in say the LinkedIn post, feel free to reach out direct to James. Thank you so much again for telling us about R&D, innovative funding, the HMRC changes and at least for me, the most interesting part was the new loan that you guys are offering. Anything that can save businesses time and money is super beneficial and very much appreciated by the industry. So thank you once again.
[00:21:41] James: Cheers for having me mate thanks.
[00:00:12] James: Got the uniform memo mate, thanks for that!
[00:00:14] Lucas: You're most welcome, James and welcome again. Do you wanna start off by just telling us a little bit about yourself, an Aussie founder here in London?
[00:00:23] James: Sure.,Yeah, thanks for having me. I've been over in the UK for about five and a half years, a fantastic place to live and a fantastic place to do business. We launched the Walmer Group March last year but it had been in planning for about 12 to 18 months prior to that.
[00:00:41] James: I'm from a sales and business development background, I worked for a private investment platform back in Australia for a number of years working with startups and scale ups on the fundraising side. Moved to the UK and I've worked with and within, different tech startups and scale ups over the last five years or so. My business partner is from more of an innovation funding background, so R&D tax grants and other forms of funding that are available to startups and scale ups and companies in the UK. We launched the business with this idea of building out a one stop shop for innovation funding. What we found in our different roles that we'd worked in over the years is that funding can be a very fragmented process, and for a lot of startups and scale ups, it can be quite a daunting process in terms of firstly identifying what they do and don't qualify for. Then finding the time to be able to go and identify and find that and then also working out if they qualify or not. So the idea behind the business has always been to build out this one stop shop, where we can service companies in a number of different facets and capacities.
[00:01:52] Lucas: Okay, fantastic. So do you mind telling the audience a bit about what that journey would look like for a startup, when they're assessing different funding options and what criteria are associated with them?
[00:02:09] James: Sure, so we focused our attention for the first year and a bit of the business with R&D tax and grants.
[00:02:17] James: So in terms of those two forms of funding, R&D tax is available to any company that effectively carries out research and development related activities or qualifying activities. Grants are available to companies that want to carry out and be funded for a project that they're going to undertake.
[00:02:35] James: So in terms of what qualifies, it's quite a broad spectrum in terms of companies, we work with companies from the technology and software industry, we work with biotechs and life science companies and then at the end of the spectrum, we work with construction and engineering companies and sustainability companies.
[00:02:56] James: It is quite a broad spectrum in terms of different sectors that do qualify for these forms of funding. In terms of what companies should look for, obviously in an ideal world, they come and speak to a specialist consultancy like ourselves but there's a lot of information online for them that's readily available in terms of them being able to do their own research and do diligence to work out what they qualify for. Obviously our door is always open if, if people want to come and have a conversation about what they may or may not qualify for.
[00:03:25] Lucas: I saw on LinkedIn that some of the rules are changing from the 1st of April 2023. Do you wanna talk a little bit about what those changes are and what actions companies could potentially take?
[00:03:50] James: HMRC has been enacting these changes for quite some time now, because this scheme has been abused quite significantly and so the main one that startups and scale up particularly wanna look out for is that from April next year, subcontracting costs that are accrued overseas will no longer be allowed to be claimed for R&D tax relief. So companies that we work with and come across, and a lot of companies in the market in general often have a lot of their development team overseas or, outsource a lot of work overseas so they have to be cautious that from April next year, they won't be able to include a lot of that activity in their R&D tax claim.
[00:04:32] James: There are certain qualifying activities and certain instances where companies will be allowed to continue to carry that out, but that's the main one to consider. Other changes that are being enacted are things like additional information being required in the claim, which most good R&D tax consultancies that I'm aware of do already. For companies that do it themselves, or might use their accountant or have done quite basic reports or tax claims in the past, it's gonna be extremely important for them to start to be more detailed in what they're including in their R&D tax claim and it just means that HMRC is doing stronger due diligence in terms of what qualifies as R&D tax relief.
[00:05:17] Lucas: Very clear takeaways if some of your R&D tax claim involves overseas contractors, then you almost need to have, let's say a business continuity plan from April next year, assuming that those overseas fees are not going to be eligible for tax credits.
[00:05:43] Lucas: Then secondly, look at your current process of how you're documenting these expenses, challenge perhaps your accountant on how they're documenting it, because the burden of information might increase.
[00:05:59] James: Yeah, exactly right and like I said, good R&D tax consultancies that exist in the market, and there are a lot of really good ones, they do do a high level of detail in terms of what goes into the technical report, which is a high level overview of the technical activities that a company is undertaken. So a lot of that already exists in the marketplace, but obviously HMRC is gonna be cracking down on companies that don't show that now.
[00:06:26] James: It's not to say that you won't be able to get claims through, but there's gonna be a higher level of precaution taken by HMRC, which means the chances of an inquiry into that are probably increasing.
[00:06:40] James: So we've explored the R&D tax credit proposition, what else
[00:06:46] Lucas: is on the roadmap and how is that evolving particularly now in this difficult economic environment?
[00:06:53] James: Yeah, absolutely. So one product that we've just completed our first trial loan for, and we're about to softly start to launch, is an R&D advanced lending product. We've spent 12 months with our lending partner developing that product to where it is, we've done our trial oan and now the idea is to start to softly launch, to lending against our own R&D tax consultancy work and then gradually build that product out with referral partnerships, with accountants and other practices that work with startups and scale ups and other businesses.
[00:07:30] James: What that involves is that it allows companies to receive their funds within days, rather than weeks or months of submitting an R&D tax claim. So the way our process works is we've designed a risk assessment process that scores the company based on the quality of the R&D work and obviously the credit worthiness and there's other stuff that goes into the process.
[00:07:50] James: Then that gives the company a loan to value ratio, which is what we'll lend them against, so as an example, if their R&D claim was £100,000 and their LTV came to 75%, we would lend the company £75,000 pounds within days of them submitting their R&D claim. So that, that frees up cash flow, which can typically take weeks or often months for them to come back from HMRC.
[00:08:16] Lucas: Okay, wow so in the current economic period, I think that that's very important to know because working capital is extremely important. So previously it would take weeks or months, whereas now through this innovative loan product, you're able to offer it in days.
[00:08:35] James: Use an example of what's happened in the last month or so, HMRC has been doing investigations into fraudulent activity in the R&D tax scheme and what's happened is that that's meant a lot of manual processes in terms of investigating R&D tax claims, which has meant that often companies are seeing huge delays in getting R&D tax benefit back, and a lot of companies will often price in the R&D benefit into their cash flow forecasts in the knowledge that they may receive it in six to eight weeks. If it's taking 12 to 16 weeks for that money to come back, then it can often have an impact on the business's cash flow, so this product has been designed to effectively support businesses through that. So it may be that companies have priced in their cash flow, or it may be having the money come in within days rather than waiting months allows them to hire that Chief Technology Officer or the new sales person, or spend the extra £50,000 on product development.
[00:09:37] James: We're soft launching that now and then the idea will be to go live and a harder launch towards the end of the year.
[00:09:45] Lucas: So the R&D tax loan is available for companies here in the UK through the Walmer Group. I suppose that's one way of companies alleviating some cash flow issues at the present moment, we're seeing venture capitalists sort of turn off the taps, funding is drying up a little bit. What innovative options for funding are out there for startups and small businesses?
[00:10:19] James: Obviously what we talked about in terms of R&D tax, there are a lot of companies in the UK that either still don't claim or may not optimize their claim, so that's probably one. There's a lot of different grants that are available at the moment, the UK has been very strong in pushing the innovation agenda over the last six months, obviously that means that a lot of these grants have become a lot more competitive as well but there are hundreds, if not thousands of different grants that are available at all different times, in in the UK at any time. One as an example at the moment that opened last week and closes next week is a fast grant from Innovate UK, it allows smaller micro businesses that are building technology in towards net zero or in healthcare to receive a grant of up to £50,000 and so it's just quite a short window. So there's grants that are available as well and then from a funding standpoint, you're right - the VCs it seems, put their hands under their back sides for a bit for now but still there's a lot of dry powder that still exists out there in the market.
[00:11:22] James: If you look at the past 12 to 24 months, a lot of the big fund managers have raised or big VCs have raised significant funds where that capital hasn't yet been deployed. I think from conversations that I've had with VCs, it's meant that the great companies are still going to get funded, the maybes that would've got funded last year probably won't get funded this year and for founders that fit into that category, it just means that extra effort of pounding the pavement to identify other forms of investment that they could be looking for through angel networks, through other VCs.
[00:11:58] James: It's just made the, work a little bit harder for them, but I guess what we saw in 2021 was a very frivolous market and raising money was very, very easy. 2022 is gonna be a harder slog but I guess it's a bit of a reality check and a bit of a correction in terms of where the market was to where it probably should be.
[00:12:19] James: My advice to founders out there and those that are looking for funding, is to look outside pure investment and look at other alternative options as well through R&D tax through grants, through other alternative forms of finance as well.
[00:12:32] Lucas: So that's extremely important for founders to know that there are other options out there, certainly grants are something that aren't perhaps spoken about enough, R&D tax credits as well, I hardly hear it get spoken about however I know that, you know they do happen in the backgrounds yeah. So during this economic period, how are you helping companies to navigate the difficulties that they might be encountering?
[00:13:12] James: I think again going back to the R&D tax narrative, it's an incentive that's available to a lot of businesses in the UK and there's a common misconception often around R&D tax that because it's called a tax credit or tax relief. A lot of companies think that they have to be profitable and be paying tax to actually receive the benefit, whereas loss making companies are eligible to receive an R&D tax benefit as well. The way that that comes is that they can actually surrender their losses and they can receive the money back as a cash injection into the business. So that's one way where companies if they are looking for alternative forms of funding and they're a loss making business, they can go down that path and they're able to get some cash into the business.
[00:13:59] James: The other advantage of that is that it puts them in good stead when they approach an investor; one knowing that they might have received some cash back from HMRC, and two that they can show that their tax affairs are in order. So a good example is we work with some referral partners who are investors on the R&D tax side, I've had investors come to us before who have been looking at companies and have said you should go and speak to them and see if they're doing their R&D tax relief, and if they're not, obviously we'll engage with them. Then that gives an investor a good idea about what their tax affairs look like because if HMRC has paid them back some sort of benefit, then obviously it gives them a bit of a tick in the box to say that someone's had had a look in terms of oversight of what they're doing from a financial standpoint. The expenditure standpoint in terms of other avenues, from a fundraising standpoint, at the moment it's harder but there's still money out there and the right deal is always there for the right investor. It's just gonna take a bit more extra work and I guess from that standpoint, my advice to founders or my recommendation to founders would be just keep pushing. It's gonna be harder, but just keep pushing it and keep knocking on doors.
[00:15:15] Lucas: Sometimes it is a numbers game after all and the more work they do, the more it will pay off.
[00:15:24] James: Yeah and I went to a SAS event last night software as a service event last night and spoke to a few, few VCs and their outlook was quite similar. It was like we're sitting on our hands waiting to see effectively what happens going through summer when obviously people in this part of the world start going on holidays and leave the office and whatnot. A couple that I spoke to last night were under the impression that when September comes around that will give them a bit more of a clearer indication in terms of what the outlook is for the rest of the year and that may be when they start to deploy more capital. Like I said, there are thousands and one of the beauties of doing business in the UK is there's a lot of money here and the ecosystem is set up to support investors with tax reliefs through SEIS and EIS and things like that. There are investors out there, again, it's just putting in the hard yards to identify and find where they are.
[00:16:21] Lucas: Fantastic and you've mentioned that you've got some strategic partnerships with investors, are there any other partners that you work with?
[00:16:31] James: Yeah, absolutely. Accountants are great referral partners for us, because what's happening in the accounting industry at the moment is a lot of smaller accountancy practices have had clients for a long period of time. Those clients are now coming to them and saying, can we do an R&D tax relief claim? Or can you help us in that capacity? Often we find some accountants will either go and employ R&D specialists and bring them in-house or they'll look to outsource that work to a specialist consultancy like ourselves, so accountants are often our best friends. We work with a few fund managers in terms of VCs, we work with some angel networks who are great. So one of them I'll give him a shout out, Chris Low, I've known Chris nine or ten years, he runs a great angel network working with a lot of startups and scale ups on the fundraising side. So partners like that are great for us because obviously we can refer business their way in the sense of companies that may fit his scope from a fundraising standpoint and then vice versa, if he's working with startups and scale ups that haven't done their R&D tax claim, or they may want a second opinion, or they're looking for additional service, then obviously it's an easy route. So I'd say from a partnership standpoint, we love working with accountants. We love working with angel networks and these sort of guys and also we work with some private individuals as well who may sit on the board of 6, 7, 8 different companies and they're fantastic as well.
[00:18:06] James: So James we've covered a lot of ground today, if there are three takeaways from an innovation funding perspective for founders and business owners and startups, what would they be?
[00:18:20] James: I think number one, using the R&D side of things is make sure you are aware of the legislation changes that are coming. Whether you're doing your claim yourself or through your accountant, make sure you know what's happening in terms of those changes. If you're using a specialist consultant, make sure they're telling you what's happening with those changes, because like you said earlier, there are some decisions that probably have to be made for companies that outsource activities overseas and this sort of thing.
[00:18:51] James: Number two, I would say again from the R&D side of things, make sure you have your house in order before submitting an R&D claim. Make sure that the technical report that you are producing, that's being submitted to HMRC is technical in nature and explains what you do at a high level so that someone inside HMRC can understand that and can justify why they're about to pay you back a benefit.
[00:19:17] James: Number three, I would say to founders, keep pushing in terms of there's a lot of doom and gloom that you can read on LinkedIn and through the media and on social media and whatnot. I would say from a funding standpoint, just keep bashing down the door, keep hustling and keep pushing for funding and always remember the beauty about 2022 is that there are so many alternative different forms of funding available to you.
[00:19:45] James: I met a guy at the event last night who is doing an invoice financing business. There's a guy that sits in the office next to us in Hammersmith who does all sorts of alternative lending and then we are building something like an R&D lending product that will allow a company to cash flow their business within days, rather than waiting the typical months or weeks or months that it can take for HMRC to pay back the benefit.
[00:20:09] James: So never get disheartened in the fact that you may not be able to raise the investment that you're looking for, there are other forms of funding available and on the investment side, just keep pushing.
[00:20:20] Lucas: Fantastic. James, thanks so much for joining us today. Anything you'd like to add to close off with?
[00:20:27] James: Like I said, I kind of tied it off with a nice little finish there but if companies want to find out more about these alternative forms of funding, so through the R&D lending product, if they want a second opinion about their existing or new R&D claim, or if they just wanna discuss anything government funding, R&D grants, then get in touch with us.
[00:20:50] James: My door's always open, I love meeting founders because even if we don't end up doing business, it's a new connection and you learn a lot about what they're doing which is some really cool, innovative stuff happening in the UK at the moment.
[00:21:02] Lucas: Well more than happy to send anyone who needs it your way, and no doubt anybody that sees you tagged in say the LinkedIn post, feel free to reach out direct to James. Thank you so much again for telling us about R&D, innovative funding, the HMRC changes and at least for me, the most interesting part was the new loan that you guys are offering. Anything that can save businesses time and money is super beneficial and very much appreciated by the industry. So thank you once again.
[00:21:41] James: Cheers for having me mate thanks.