Funding the Business
Types of Funding
As entrepreneurs launch their business entities, they frequently have difficulty grasping the various types of capital funding they may be able to secure to run their business operations. The following piece explores several of the more frequently utilized capital sources and discusses the positive and negative aspects of each type of funding.
After you have concluded that your business is in need of external funding, you must determine which kind of funding source to seek. There are several options available to business owners, and all of them come with good and bad elements. Let us now investigate the available choices as well as our impressions of the benefits and drawbacks of each one.
- Bank Lending
- Factoring of Accounts Receivables
- Friends, Family and Acquaintances
- Revolving Credit Card Usage
- Borrowing Against Equity
- Assistance from Angel Investors
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How to Present to Investors
One percent of the entrepreneurs who seek funding from Angel Investors succeed. How do you increase the odds in your favor?
When an entrepreneur decides to seek funding from Angel Investors, it is important to understand the process, the people and the insider information on being successful in your bid for funding.
Private money is there by the boatloads, but it is very selective. It is looking for business models that have enduring capabilities, ...
-- John Morris
Bootstrapping Your Venture
To bootstrap is to self-fund your venture. Most start-up companies start this way.
Bootstrapping implies no outside funding has supplied capital to your business. This does not mean it does not cost you money. Even though you have decided to start your business with zero investor funds, this does not mean you should be averse to receiving help.
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What is an investor or group of investors looking for when considering funding a business?
Here are a few things:
- Solid idea or concept
- Sustainable
- Scalable
- Strong Management Team
- Exit Strategy
- Intellectual property*