Photo Credit My Networking Apparel
Common funding models that a business generally chooses to access are:
Small business loans
When we talk about business funding options, small business loans are often first thing entrepreneurs look up to for assistance. The small business loans are very similar to personal loans in a way that they approve a certain amount of funds in return of a rate of interest in future; pretty basic.
Funding rounds
Several startups go through multiple funding rounds. The fundraising stages can be categorized into three groups: Series A, Series B, and Series C funding. Each of these categories are aligned with the stage the company is at. In each funding round, money is usually exchanged for some company equity, which means that the investors take a return in the company share on their investment.
Venture Capitalists
When we talk about the sources of funds for business, it is impossible to not mention VCs. A venture capitalist is a private investor who gives funds to promising startups. They are often a part of a larger venture capital company who has a board which votes on which company/companies they will be backing.
Crowdfunding
For entrepreneurs, the combination of a business idea and little to zero funding takes them to crowdfunding. It is a type of funding in which small amounts of capitals are raised from a number of individuals to back a business venture. The fund type makes use of the wide network of people on crowdfunding websites and social media platforms that bring entrepreneurs and investors together. This model doesn’t just help increase the entrepreneur network but also the investors circle by giving individuals a chance to become serial investors.
Incubators
A business incubator or accelerator program as it is commonly called, is a group which is primarily focused on helping businesses get off the ground. The incubators are usually founded and funded by other companies which want to help emerging businesses reach their complete potential. They also provide space for the companies to work in, give funding assistance, and even provide mentoring. The holistic nature of support which they offer makes it one of the most popular sources of funds for business. Which makes them very effective and critical to start ups and ongoing funding.
There is so much more to cover in this space, but I felt this was as good of a time as any to share a few business funding and financial lifestyle nuggets.
For more information and guidance contact 1st Capital Wealth Management Group.
312-952-8040/Cell * 312-836-3800/Direct Line * [email protected] * www.1stcig.com,
Follow on LinkedIn, Instagram and Twitter/Chewsviews