All successful businesses need a source of captial. Without proper funding the opportunities for growth are slim to none. Too often, we see budding entrepreneurs who have brilliant ideas but take the wrong turn when it comes to seeking funding.
One source of investment is venture capital. However the reality is, that even with the many creative ideas, the amount of venture capital investments within the last few years has dropped. The current economic climate is volatile to say the least, making high profile investors are cautious when deciding where to place their funds. With so many worthwhile startups competing for attention, many investors find themselves unable to keep up to the demand.
Here are some additional funding options that might better suit your business type and objectives.
Approach the Banks:
Banks offer small businesses a number of financing options. If you supply them with proper documentation and present a convincing case, these types of institutions will be more than happy to offer you a business loan or a credit repayment program that suits your individual needs. All you have to do is demonstrate cash flow, present a solid business plan and convince creditors that yours is a once in a lifetime investment that they cannot afford to lose. Know your numbers; there is nothing worse than humming and hawing in front of a group of people who are ready to invest in you. Banks are likely to consider your personal banking history and repayment habits. For that reason I’d recommend that you initiate a personal relationship with the financial institution of your choosing before approaching funders with your request.
Apply For Grants:
There are many local and and government granting options Look for a collaborative government or community based project research initiatives that helps advance mutual interests. Such resource sharing arrangement will optimize growth potential for small and medium size businesses.
Independent Investors & Acquaintances:
Independently run organizations with cash to spare, will often choose to provide you with the necessary funds for a return on investment or as a one-time grant. These types of entities are willing to endorse ventures that they deem to be of value to existing community efforts or as part of a philanthropic initiative.
If asked, friends and family can lend a hand. This option is great for smaller cash loans and does not require too much headache. Always be aware of whom you’re dealing with and communicate at all times.
Whatever funding type you choose, know that every decision takes risk and preparation. Strategic investors, venture capitalists and independent entities are looking for the next best thing so if you play it right, you may be well on your way.
For more detailed information and a great comparison of funding methods, read a great article by our CEO Reg Charney on funding and your business.