Grasshopper is leaving the UK

We embarked on a journey to provide small businesses with a professional phone system. As of January 2018, we will no longer be accepting any new signups.

We will help our current customers port their numbers over to another carrier before we officially shut down the service on 30 April 2018.

Doing business in the US? Visit our US site.


Investors and funding

Ok, so you’ve got a business idea, and you’re working to make the dream a reality, but you’ve got to consider funding.

After all, you need money to turn your idea into something tangible. You need pounds to pay your employees.

If the money isn’t coming in yet, it’s tough to build a top notch product or service.That’s why many small businesses and start-ups look for funding and seek out investors.

Before you even begin to consider outside investment, consider how you can launch the company and get to revenue before you have to raise money. Although it seems hard in the short-term, it’ll be better for you in the long-run in terms of your knowledge of the process, and building your own equity.

So, how do you do it?


Bootstrapping means that you raise money without any help from investors. It’s how we got Grasshopper off the ground. If you can build your business without investors, do it this way.

You might bootstrap and keep your full-time job or quit and use your savings to get business off the ground. Begging your parents for money counts as bootstrapping.

Why bootstrap? You’ll retain complete control. That might not sound like a big deal, but when you’ve got investors’ hands in your company, you may not be able to build your product exactly as you dreamed. Things get difficult when you’re playing with someone else’s funds.

Here are some of our favorite resources for bootstrapping:

Bank loans

Bank loans are one of the most common ways to get funds, and don’t assume your bank will turn you away. According to Anthony Browne, chief executive at the British Bankers’ Association, “lenders are supplying vital funding to small and medium-sized enterprises across the country.”

In order to be considered for a bank loan, you will need to come equipped with a business plan and financial projections. If you’re struggling to come up with these, there are plenty of resources available to you including GovUK, Start Up Donut, and Barclays.

This video from GovUK is a helpful resource for forecasting your finances:

Be aware that the bank may want you to give security against the loan, in the form of your house or your car.

The Better Business Finance’s tool can help you determine what bank loan option will work best for you:

Help choose finance type

A few tips for getting a bank loan:

Government schemes

The government has 630 initiatives meant to help SMEs. They have apprenticeship programmes, incentives, training opportunities and grants.

For a growing SME, the government offers direct grants, soft loans, equity finance, and free or subsidised consultancy. There are even more, depending on what you’re looking for.

You can visit Gov.uk’s Finance tool to look through the options, but they generally fall into a few categories, explained below:

Finance and support

Direct grants

A direct grant is a cash infusion. The government has over 300 of these direct grants, many of which are funded through the £3.2bn Regional Growth Fund. This fund is dividing up £3.2bn for promising SMEs in the UK.

Soft loans

A soft loan is more like a grant than a bank loan. The terms and conditions are softer than they would regularly be. The government-funded Start Up Loans offers SMEs loans of up to £25,000 with a 6% interest over a 12 month repayment “holiday.” Organisations such as Big Issue Invest and The Prince’s Trust also offer soft loans.

Equity finance

Equity finance is when someone gives some money to a business, and is entitled to a certain percentage when that business grows. The government actually provides tax relief to investors willing to give some money to your business, so it’s worth looking into the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS).

Free or subsidised consultancy

Government-run groups provide help and assistance to UK-based small business owners and start-up founders. Wales has a highly-regarded support service with many events throughout the region, for example.

Selling shares

As mentioned above, financing your business with equity is a great option, especially as the government now offers tax relief programmes to investors.

Equity is one of the most common ways to fund a small business. However, small business equity isn’t right for every situation. In fact, we’re a bootstrapped company and we didn’t take money from outside investors, but that doesn’t mean it’s not right for you.

It can be a tough decision to sell shares of your business to people you hardly know — and even tougher down the road to give a portion of your profits to someone who did nothing but open their wallet. You could lose a bunch of control, so you need to proceed carefully.

There are two types of equity:

How to find investors

Equity will only work if you’re able to find investors. Your investors don’t have to be on Lombard Street-- they will likely come in the form of friends, family members, business contacts, and potentially angel investors or venture capitalists.

Bringing a VC investor into the business has been a positive experience. It's best to view investors as partners in your business, so it's important from the outset to find an investor who shares your vision. - Luke McCormick of Edge Retreats

If you think your business could benefit from more than just pounds, but also a little business advice or mentorship, you might consider a start-up incubator.

Start-up incubators are large companies that offer seed money, expert mentorship, supplies, and sometimes even office space in exchange for a share of company ownership (equity).

Some of the most popular incubators today include Oxygen Accelerator, Innovation Warehouse, and Central Working. among others. These incubators are sometimes specific to certain fields (technology or entertainment, for example), and others will accept applications for all types of ventures.

Because the value of start-up incubators is so great, acceptance into them is typically VERY competitive across all industries. But don’t let that stop you – if you believe in your idea, chances are you can convince someone else to believe in it too.

Incubators and accelerators to check out

Oxygen Accelerator (Google Campus)


Oxygen Accelerator is one of Europe’s most established tech accelerators. It’s a 12-week intensive bootcamp that puts together investment with training. They offer €21,000 per team in exchange for 8% equity. You’ll gain access to 100+ mentors, startup offers and deals, and position yourself to get even more funding.

Accelerator London


Accelerator London is a premier business accelerator. They offer business incubation for early stage and start-up businesses with two different incubation packages. They are interested in companies with commercial and technological aims.

Innovation Warehouse


Innovation Warehouse is more community than traditional accelerator. Based in London, they are home to successful startups and angel investors that work in their space. Innovation Warehouse offers an in-house accelerator programme as well as mentorships.

Central Working


Central Working is a co-working space with multiple locations in the UK. They do not have any formal accelerator or mentorship programmes, but they do have a collective of hundreds of members that you can learn from.

For a complete list of incubators: http://www.entrepreneurhandbook.co.uk/incubation-centres/


Crowdfunding is a relatively new way of seeking investors for a start-up or small business. In crowdfunding, you ask the general public to invest in your business, usually in exchange for a product or service.

"The sector is primed to go on and completely replace aspects of retail banking," Julia Groves, chair of the UK Crowdfunding Association, told The Guardian.

Here are a few popular crowdfunding sites: