5 Things You Need to Know About Growth Equity

Many entrepreneurs are starting their own online businesses and this can be a smart business move.

Running an online business can be incredibly lucrative with low costs, the ability to work remotely and an operation which is easier to manage.

Despite this, you must still get enough funding to get the operation running up to a high standard for the time that you launch.

Here are a few good options for funding your online business.

1. Personal Savings

Personal savings can be a good way to fund a new business venture because it means that you are in no one else pocket but your own.

There are also risks attached as there is no guarantee for success so you may not see this money again.

2. Investment Bankers

Investment bankers spend their whole lives partnering businesses with investors. In essence, they identify new opportunities for investors to take advantage of, helping them make more money.

This is great news for you as you can contact an investment banking firm and let them know you need money. They will find some investors who are interested in your offering, providing you with the funds you need. 

One key note with investment bankers is that you have to pick a firm with lots of experience. Look at companies like EverBlu Capital, chaired by veteran advisor Adam Blumenthal, who has over 10 years of experience in the industry.

The longer a firm has been operating, the more experience they have in finding the best investors. 

3. Angel Investors

Angel investors can be a great source of funding because in addition to finance you can often get guidance and mentorship.

Keep in mind that you may have to give up part of the business and you are unlikely to get as much funding as you would with a venture capitalist.

4. Venture Capitalist

Leading on from this, a venture capitalist is a good option because they can provide significant capital, provide support and monitor the progress of the company.

You can lose some control of the business with this route, they tend to only invest in reliable and stable brands and will only stick around until their capital and profits have been earned.

5. Small Business Loan

A small business loan works similarly to a cash loan in that it provides you with the money that you need to cover set up costs, wages etc which is borrowed at a fixed interest rate with monthly payments made over a pre-determined period.

Specialists can provide unsecured business loans which means that you do not have to risk your home or another large asset.

Additionally, repayments can be made on a percentage of your monthly takings which is helpful for new online businesses where there may be instability and seasonality can affect sales.

6. Crowdfunding

This method has become very popular in the last few years.

Certainly, you may have noticed a lot of companies have started running crowdfunding campaigns as the business world adapts to this new normal. This is because they need an influx of capital after some very trying months during a pandemic!

Nevertheless, crowdfunding still works well for startups. The idea is that you put your business out there for anyone to invest in. This includes seasoned investors or members of the public.

It’s an excellent way of raising lots of money from many different sources, and it can also help you establish a customer base from the start.

7. Online Networks

The last method is to open up Google and search for angel investors.

Sounds simple, doesn’t it? That’s because it is! Have a look online and you will find plenty of investor networks that open up loads of opportunities. Sometimes, you can contact investors directly via LinkedIn, or advertise your business with a post on sites like Quora.

This can be both the best and worst method of finding investment – it depends on how lucky you are! 

Before you seek out any investors, make sure you have a solid business plan that shows them why you’re worth their money.

Focus on explaining your business, but ensure most of the attention is on what people gain from investing in you. This increases your chances of success!

These are the 6 best methods of financing a new online business. It is essential that you get the funding that you need to get up and running as it can be hard to change people’s perception of your company so you need to start off on a strong foot.