Many startup companies turn to venture capital to get them off the ground and launch them to the promised land. But, entrepreneur Corey Shader says there are ways to grow your business without using venture capital.
There’s no denying how impactful venture capital can be. The National Venture Capital Association reported that, in 2020, 10,800 companies based in the United States received some form of venture capital.
It’s not just an American form of investment, either. In the first six months of 2021, for instance, there was more than $288 billion of capital venture funding invested across the world.
With so much going around, entrepreneurs may question how they can grow and scale their startup without venture investment. Here are some ways to do just that.
Debt
Taking on debt as you are starting up a business is not always preferable. One of the main reasons is your company may not have enough cash flow at the outset to be able to meet startup loan payments in addition to all other liabilities.
There are some cases in which taking a loan to start your business could be viable. You could take a relatively small loan, for example, to help you stock up on inventory, purchase necessary equipment or technology, or launch marketing efforts.
Crowdfunding
Crowdfunding campaigns have become an increasingly popular and common way to fund a startup. There are many stories in which startup companies were able to raise a significant amount of capital through crowdfunding.
This can be a great way to fund your startup because it not only raises capital but serves as a way to jumpstart sales and interest in your products or services. A well-written and designed crowdfunding campaign will entice customers to make a purchase from you before your product even hits the market.
One thing that entrepreneurs need to understand about crowdfunding is it will require startups to use the funding exactly how they say they will in the campaign. You will be obligated to deliver on what you have promised these customers.
Equity
Another option to fund and scale a startup is equity fundraising. Through this option, you’ll be giving up a percentage of ownership in your company in exchange for money to use to scale your business.
This can be done in a few different ways today.
You can approach family, friends, and colleagues to raise funds. A lot of entrepreneurs prefer this route, as it would allow them to get the necessary funding without having to take on active partners.
Another option is through equity crowdfunding. Instead of selling products on a crowdfunding platform, you can create a campaign that will give others a slice of your company as long as you raise a certain amount of money.
Corey Shader says another option is traditional equity fundraising. You can find a strategic business partner who would not only provide necessary capital but also be able to bring something more to the business. This could be assistance in an area of their specialty or deals with vendors they’ve already established.
While giving up an ownership stake in your company might not be a preferable route, it also oftentimes results in the most significant amount of non-venture capital funding for startups.
About Corey Shader
Corey Shader is a self-made entrepreneur, consultant, investor, real estate developer, and founder of several companies, notably Insurance Pipeline. Operating primarily out of Ft. Lauderdale, Corey’s endeavors span across the nation, consulting for startups, and sitting on the board of digital media and senior healthcare agencies. As a consultant, Corey helps young businesses develop sales funnels and maximize profitability. Shader takes pride in challenging others to push themselves to be their very best — he believes in constant self-improvement, inspiring others through sharing his own life experiences.
