Funding your business is one of the first — and most important — decisions owners make in their entrepreneurial journey
One way to get funding to build and grow your business is through investors, who typically offer financing to companies in exchange for an ownership share and an active role in the company.
Investment capital differs from traditional financing sources:
- Focuses on high-growth companies
- Invests capital in return for equity ownership (it’s not a loan)
- Accepts higher risks in exchange for potential higher returns
VENTURE DEBT
Venture debt is a loan for rapidly expanding investor-supported businesses. It is most commonly acquired simultaneously or shortly after a share round — and provides an appealing financing option for expanding venture-backed firms looking to prolong their runway, decrease their cost of capital, and keep innovation alive.
CAPITAL RAISING
While a select few firms are lucky enough to thrive with little or no “outside” assistance, the vast majority of successful startups have progressed through many rounds of external investment. These funding rounds serve as stepping stones to the company’s growth, while allowing outside investors to put money into a developing firm in exchange for equity, or a portion of the company’s ownership.
