Making money always takes money, and no matter how promising your business idea may be, you will need capital to get it off the ground. Traditionally, new enterprises have relied on venture capital firms to finance their startup costs, but this source isn’t suitable for everyone. By considering business funding alternatives, you can obtain the finances you need to give your company a strong start.
As a new entrepreneur, the last thing you want is to limit yourself to a single model for growth. Venture capital firms tend to make assumptions about which types of businesses and ways of doing business that will be promising investments.
These assumptions can seriously stifle your company if:
Even if you do ultimately decide to get your funding from venture capitalists, it’s still good to consider business funding alternatives. The better you understand all your financing options, the more negotiating power you will have with venture capital firms. Considering alternatives also makes it easier to go elsewhere if you don’t agree with venture capitalists’ vision for how you should run your company. This gives you the freedom to do business as you see fit.
If you’ve only ever considered venture capital, you may be surprised to learn the sheer number of alternatives you have for funding.
Remember that with some ingenuity and creative thinking, there are alternatives to venture capital when you need an infusion of cash.