Harnessing Growth Capital
Financing is an important part of any business, especially when the business is just starting. There are many options for securing growth capital for a company. With the right source of growth capital, a company can achieve its goals and objectives to take the organization to the next level.
Venture Capital Firms
Venture capital firms are organizations that invest in businesses on behalf of clients in exchange for equity in the business. The investments are typically large and this results in a strong interest in the company’s operations and direction, including how the investment is used in the organization. While this can be an effective way to generate funding for a company, it typically comes with the caveat that the investment firm will have a notable voice in the company, its operations, and its decision-making.
Debt is frequently used by small and start-up businesses to become operational, grow, or achieve goals and objectives. When borrowing funds, the borrower typically has the only voice in how the funds are spent and as long as the repayment terms are met, the financial institution is satisfied. However, certain types of borrowed funds may be hard to secure, depending on the requirements for borrowing, such as a credit score or collateral.
At some time in the life of a company, an owner is likely to invest some of his or her own money into operations. In fact, some financing options require that the owner has already invested a given amount before they qualify for the funding. Owner investment is a good way to inject financing into a company because the owner already has an interest in the company’s success and the money may not need to be repaid. However, if the owner has limited funding, this may only be a temporary solution for financing a company and meeting its needs.