Entrepreneurs heading up small businesses and startups know all too well the vital role that funding plays in their venture’s success. 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 scale from the get-go.)
Ciaran Burke, co-founder and COO of Swoop, gets it. Before Swoop, he founded Hiive (think LinkedIn for creatives), so he’s no stranger to financing travails. In fact, his latest venture is all about it.
Swoop helps both small businesses and startups discover funding opportunities that go beyond VCs, loans, and grants. Founded in 2018, 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, provides Burke with hard-earned insights into the fiscal challenges that businesses worldwide face regularly. It’s worth hearing what he has to say about the most common financial roadblocks entrepreneurs encounter — and what can be done to move past them.
Starting out
Building the Hiive platform (now called ScreenSkills) offered a proving ground of sorts for the Irish entrepreneur.
“That was my first introduction to assembling an engineering team 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 lot more experience with corporate finance and helped pull together high-end investors.”
As Reynolds explained how to attract that kind of capital, it became clear to both that many business owners couldn’t easily access such information. There was a real need for what would eventually become Swoop.
“The idea for the platform came at exactly the right time, as there were many useful trends that we could take advantage of, like sharing open data (such as open banking), connecting to public sources like business registers, and connecting to accountancy software,” says Burke. “This allows us to sense-check what an SME’s financial position is and then check for finance eligibility against a large range 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 all small businesses and startups.
Universal truth #1: Identifying potential funding 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 three products 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 in alternative lending, such as investments, grants, VC firms, and private 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 Google searches only get them so far. Often, they turn to their accountants, who are probably not experts on the various forms of funding or how to access them.
Indeed, because Swoop fields so many queries from accountants versus entrepreneurs, Burke created a product that would allow accountants to add their clients onto the platform.
Universal truth #2: Economies aren’t predictable
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. Many business owners discovered this first hand during the COVID-19 pandemic.
“First, the business shutdowns caused a mad rush to access government-backed funding,” says Burke. “Then, the opening and closing window periods meant that businesses had to navigate demand spikes and troughs. This prompted many businesses to direct finances into e-commerce to make up for the shortfall in physical customers. Now, as the world emerges from the pandemic, businesses can look forward to better opportunities for asset-backed lending and lower borrowing rates.”
Business owners face an almost impossible task. Not only must they find the right financing sources, they also have to find the right one at the right time.
Universal truth #3: Entrepreneurs don’t always know if they qualify for a financial product
“One of the greatest frustrations for business owners is figuring out whether they’re even eligible for a particular funding product.”
“Business owners are bombarded with marketing for financial products, only to find out that they’re not a good fit,” says Burke. “Many finance providers come across as really open to invest in all businesses when in fact they’re looking for ideal slivers. It’s therefore important to help businesses identify exactly which sliver they fit into and who the providers are in that space.”
As entrepreneurs better understand how eligibility works, they also gain new perspectives on their own businesses. That’s why Burke finds the educational aspect critical. “As we explain concepts such as merchant cash advances and double Dutch to our clients, they get a better understanding of all the different financing solutions,” he says. “Through their product understanding, they become much more comfortable deciding what solutions would be beneficial to the business and what wouldn’t.”
Universal truth #4: Financial applications are painful
Finance applications are no picnic in the park. They’re typically lengthy and repetitive, with the same questions posed to applicants over and over. Most business owners are already exceptionally busy, and onerous funding applications come at the cost of other parts of the business.
“Sense-checking for eligibility and simplifying the application process are the two biggest pain points globally.”
“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 create documents they can use for multiple applications,” says Burke.
Constant improvement
Knowing your customers — what motivates them, their pain points, how they define success — is a business truism. So, as an entrepreneur who’s launched two companies, Burke has an insider’s feel for the financial hurdles that 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 to them. Just as their customers and prospects are navigating shifting markets, so too is Swoop learning which services and products 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 to play 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 own teams, which has a positive effect on the entire business.”