Do you have a startup business that is on the verge of raising capital? If so, you have a range of options available to you as an entrepreneur. Some options require investor verification and others do not. Below we explore just three of the common methods you can potentially take advantage of in order to raise the capital you need to move your business forward.
Venture Capital
As the owner of a startup business meeting capital, you may decide to go the traditional route of obtaining funding through a venture capital firm. These firms often have the ability to provide large sums of capital even to the point of funding an entire project. They can typically provide more funding than an average angel investor.
Venture capital firms can serve as valuable resources in developing your product or idea. As you scale your business, they can provide you with valuable capital for your business development needs. You can find VCs that focus on supporting certain industry sectors; something that can prove to be a valuable asset to your company.
One drawback with using VCs is the time period often involved in obtaining the funding you need. The process can last several months to a year. These firms prefer to establish a solid relationship with the founders/owners of the company prior to making an investment. As well VC firms manage a number of stakeholders and may want to have a say in the direction and plans of your startup business. Be sure to take this into account for receiving funds from a VC.
Equity Crowdfunding
Entrepreneurs now have the capability to solicit and raise funds online through convenient platforms such as Crowdfunder and others. These funds are raised by offering accredited investors equity in the company. This type of crowdfunding also helps develop an awareness of your brand and pull in new customers to your business.
Equity crowdfunding is highly scalable, allowing you to raise funds in an efficient and relatively fast manner compared to other types of capital raising techniques. You can also get thousands of eyes on your startup very quickly.
It’s important to choose a quality crowdfunding platform – one that has a solid track record of success going back several years. As well, the platform should consist of a number of reputable and reliable investors. When soliciting and raising funds, you’ll need to evaluate potential investors through a process called investor verification.
Crowdfunding
You can raise funds through sites such as Indiegogo and Kickstarter through crowdfunding. Startup companies often provide investors with certain types of benefits and rewards in exchange for funding. Crowdfunding can be used to test the waters of your market and evaluate demand before applying resources to product production.
One challenge with crowdfunding is that the entire arena is becoming more and more competitive. In order to compete, you may need to offer expensive benefits which can take away from the capital you have to scale and develop your business.
If investor verification is a required step in the process of obtaining the funding you need, make sure you link up with a powerful resource that handles this process effectively on your behalf.