How to raise more funds for a company to expand

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Funding is the most important thing for a business. Funding ensures that the business survives and thrives as the establishment moves forward. It also helps to keep things in order and to ensure that there is always some amount of money in rotation as a part of working capital.

Funding is required at every stage of the business and more so when the business begins. The business’s investors and owners must constantly raise funds to support the company and help it expand and function effectively.

Fundraising is another important aspect of business enterprises as it helps keep the business alive and ensures there is funding at every stage. It can be done either using an equity financing method or a debt financing method. Both these methods are equally useful and needed.

Types of Funding at each stage of business

There are many levels of funding requirements at each stage of business. Some of the most important ones are mentioned below:

  1. Initial Funding/Investment

This is the type of funding level where the investors and the business owners. This is achieved when the company owners pool their own money or bring in money from their family and friends. This forms the initial investment of the company.

  1. Seed Funding

Seed Funding is the next level where the company is now incorporated but needs further investment for product research, development, market study and the manufacturing or preparation for launch. This investment can be brought in by equity or debt financing options.

  1. Series A, B, C Funding

Series A, B, C funding refers to the rows of funding that are brought in during the launch and market introduction of the product, for marketing and advertising of the product in a bigger market or expansion of the company to a larger level or to branch out in different products or divisions.

Read more: Ultimate Need For Know Your Business Solutions in Finance

Funding Methods for Companies

A company can seek further methods to raise funds from different sources, and the most important ones are listed below:

  1. Crowdfunding

Crowdfunding is facilitated by many internet-based financing companies that help businesses to acquire funds from many investors at a public forum in exchange for profits from the company or in the form of loans from various people in public.

  1. Small Business Administration

SBA or Small Business Administration is an organization in the USA that helps small businesses to acquire funding by lending it to small startups and companies. There is a certain interest percentage that is charged on the loan provided.

  1. VCs and Angel Investors

Venture Capitalists help in acquiring funds in exchange for stakes in the company. Angel Investors are individuals who invest in the company if they feel that the company has high growth potential.

They function more like fundraising for nonprofits, unlike VCs, who charge equity investment in the company they are willing to invest in. VCs invest in companies as part of a bigger board where many VCs participate and provide inputs for investment decisions.

  • Microloans

Microloans are provided by private lending companies that can lend a small amount to businesses in return for certain interest. These are small-time loans that are more suitable for smaller establishments or for a particular task at hand, such as marketing budget, logistics budget, etc.

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