Raising capital is a huge challenge for a startup or early-stage company, and it can be a daunting task. Selecting an incorrect method for securing funds could burden your company and lead to long-term detrimental effects to company growth. And raising capital has never been harder. With traditional lenders requiring prospective clients to satisfy increasingly stringent financial terms and conditions to secure capital, entrepreneurs are increasingly looking to other avenues for finance.
Generally, traditional lenders such as banks will not provide large capital to startups due to the high risk involved and the lack of assets to insure any arrangement. Before a company reaches sufficient scale to be able to borrow from these institutions, startups have to consider other sources of finance.
It has become increasingly popular and simple for startups to secure capital through venture capitalists. In the United States alone, for example, venture capitalists invest over $22 billion in companies in the country every year, according to the National Venture Capital Association.
Bentman Consulting advises early-stage startups to pursue capital via venture capitalists due to the aforementioned issues. Here we detail the typical process for securing capital through this option.