For Broadcast October 29, 2008

Where's the money for your start-up now?

Don't be fooled by the credit crunch. There is still money to be had, but the big change is what that money will cost you.

Suffice to say it is not chicken feed. To be honest, if you need to raise money between now and Christmas it is going to be damn expensive. Did anyone else get the same call as me last week from a very nice-sounding salesman who offered me a 9%-interest loan?

The cost of venture money right now is a sizeable equity stake in your business. "It's all about valuation and right now the power is with the buyer, not the seller," says one entrepreneur. Here's a case in point. Motive Television has set aside a "rescue fund" for "good-quality" indies "which have been affected by the credit crunch". Motive will effectively tide them over while they sort out their cash-flow issues - for the small matter of a stake of between 25% to 49%. Looks as if the Dragons from BBC2's Den are not the only ones who strike a hard bargain.