How to Properly Fund a Company - Los Angeles Post-ExaminerLos Angeles Post-Examiner

How to Properly Fund a Company

Image by 3D Animation Production Company from Pixabay 

In a fast-paced world where technology provides instant feedback on everything that goes on around us, it can be difficult to get real feedback, real information, and real answers.  But at the same time, a world focused on technology makes it very simple to start a new company.  However, in the process of starting a new company, it is easy to lose track of the fact that financial support is necessary and often very difficult to come across.  In fact, there are even major television shows dedicated to startups getting properly funded.  So, how do you and your venture firm secure the capital necessary to actually build your company, your brand, and your client base?

Explore Various Funding Sources

The first step in any important decision that you have to make comes down to education.  The more you know about your options, the better off you will be when it comes time for you to actually make a decision.  Here are some of the most common funding options for your startup or venture firm:

Bootstrapping your own business: Essentially, the idea here boils down to creating your own capital and funding your company out of your own pocket. Utilizing personal funds to start a business is by far the most common and for most people, the most realistic way of getting a new business off the ground.  However, it can be limiting because most startups do not have the cash on hand that they need to fully get their business going.  Additionally, it really only works with smaller-scale operations, as larger businesses generally require much more capital and infrastructure.

Crowdfunding: Modern technology and its innovation have allowed for the internet to become a source of funding for companies just getting on their feet. Websites like Kickstarter, GoFundMe, and others are crowdsourcing sites that allow entrepreneurs to gather funding from all sorts of sources.  However, it can be incredibly difficult to break through and become popular enough to gain any traction here as crowdsourcing websites are extremely competitive.

Angel investment: Angel investors are incredibly wealthy individuals that are willing to invest in business ideas that are just completely out of left field. Examples of angel investment include the popular network television show Shark Tank, where several billionaires group together to offer money to startups for a percentage stake in the company.

Venture capital investment: The final source that will be discussed in this article is venture capital investors. Venture capital investment sources are usually large funds that are managed by industry professionals that invest money into startups based on expertise and professional analysis of a given startup.  Essentially, venture firms are large sources of capital that are invested in companies with a percentage return on investment as opposed to investing in the stock market or any other kind of market.  Venture capitalist investments offer the most benefit to the individual or company receiving the funding, as the professional expertise and industry experience that the companies that run these firms have are unmatched by any other funding source.  Not only will your company receive the funding it needs, but it will also receive an invaluable source of support and insight into the market that you are trying to break into.

In Summary

At the end of the day, the decision for the direction you are looking to go in sourcing funding for your company is up to you and to your company.  Make sure that you are willing to check all the boxes, weigh your pros and cons, and choose a funding source that gives you the most comfort and stability over the course of the life of your business.


About the author

COMMENT POLICY

Comments are closed.

HOME / ABOUT / CONTACT / JOIN THE TEAM / TERMS OF SERVICE / PRIVACY POLICY / COMMENT POLICY

Los Angeles Post-Examiner