Whether you are at the beginning stages of your business or looking for funding for a new product or initiative, there will be a time when you seek capital. It is inevitable, and each business might go about this differently depending on the age, what the money’s for, and the risk factors that go into the venture itself. If you are seeking to raise capital for your business, a venture capitalist, business loan, angel investor, crowdfunding, or private equity could be the answer you need to take that next step in your entrepreneurial journey.
Find a Venture Capitalist
If you have a mature company looking for capital, seeking out a venture capitalist might be your best plan. Unlike other options, a venture capitalist works within a firm instead of individually while also looking to invest in a lower ratio of businesses. Fortunately, when they find a business that piques their interest, they are likely to invest far more than other options.
Acquire a Business Loan
A business loan might be predictable, but it can be a solid choice for businesses that are financially stable and can afford the interest and risk that come with such a loan. Oftentimes, banks will seek businesses that are over two years old, have a strong annual revenue, and have a credit score over 600. While these are not written in stone, it is an excellent guideline to follow if you are looking to raise capital. There are also branching paths, such as invoice financing if you need money fast or equipment financing for items like tech and office furniture.
Look for an Angel Investor
Angel investors are considered accredited, very wealthy individuals who typically invest in businesses alone or with other angel investors. If you have ever seen the show Shark Tank, you already know some angel investors. However, Shark Tank is also a great representation of what it looks like to get capital from an angel investor. You must have a great pitch ready, know your numbers, and be prepared to sell your brand and yourself to someone from the outside.
A new and upcoming way that many businesses are raising capital is by utilizing crowdfunding platforms. Sites like Kickstarter, GoFundMe, and Indiegogo are now household names, as many businesses find great success from them. Not only can they help companies raise money, but they can also connect them with future consumers and possibly larger investors as well. It can be a great way to get capital while simultaneously marketing your brand and product.
Find a Private Equity Firm
Choosing a private equity firm allows them to buy company shares on behalf of institutional and accredited investors for money in your hands. This transaction is between a private company and a private equity investor. This can be a simple and secure way to raise capital in return for shares.
Ask a Professional
These five options are prime examples of secure ways to raise capital for your company, but when it comes time to choose which one is best for your business, you might want the guidance of an investment banker. With an investment banker on your side, you can dig deeper into these options and see which are best for your business, depending on the company’s age and what the capital is needed for. If you are looking to raise capital and want to take the first steps, contact the team at ReVera Capital.