Posts tagged: venture capitalists

Business Finance

Business Finance And Entrepreneurship


Business financeis no longer limited to funds procured from a bank or other financial institution. With the rise of entrepreneurship and the global response to encouraging growth in this area, there are now many other options available to those looking to start a small business. These options include the following

Business Finance

Business Finance



  • Venture capital: This is where investors and entrepreneurs come together for a common goal, namely profits. Venture capitalists make their money by investing in many different businesses. That is why this relationship will only work if you can prove the future profitability of your business to the investor.
  • Personal loan: Friends and family often form the crux of funding for small business ventures. These loans are great in that they usually have the lowest interest rates and best repayment options.
  • Small business loan: You can get a small business loan from a bank or government program focusing on growing entrepreneurship. You must have a good business plan, clear credit rating and most often some kind of collateral as well.
  • Credit cards: Business finance in smaller amounts can be dealt with by simply using your credit card. The plus side to this option is that you don’t have to jump through any hoops or make any kind of commitments. The negative side is that you will have to pay high interest rates in return.
  • Online funding: There are quite a few websites that connect investors and entrepreneurs. You register with the site and list your business idea along with other important information like financial forecasts. You will then be put into contact with relevant investors who are interested in helping you get your project off the ground.


The Beauty Of Investment Funding


Many people who are on the brink of starting their business are quite weary about opening up their company to outside investors. They tend to feel that they would be sharing something that should be entirely theirs and perhaps don’t want outside input to the way they do things.


Venture capital doesn’t have to work this way though as there are a few options for business owners considering this option:


  • You can offer part ownership of the business but have it limited to a specific time period. For instance, investors will be major stakeholders in your business for a period of no more than five years during which they will benefit from equity and profits. Once this period closes, they will withdraw from the company and you will not owe them anything.
  • Some business owners approach venture capitalists with a booming business idea that they both work to bring to fruition as quickly as possible. The success story is then sold off and the investor ends up making exponentially more than any stakeholder agreement would have made him. You then take your cut from the sale and move on to grow the business you really want.

Business finance doesn’t have to be a heavy shadow over your dreams of business success if you simply take time to properly investigate your options.