Startup Companies, Raising Capital, and the Circular Logic Dilemma
Raising capital as a means to fuel company growth and development is one of the most essential — yet perplexing — activities for possibly any company to pursue, be it a start-up business or a long-time company. Very new companies, particularly, experience the toughest time acquiring good sources of capital formation. The relatively young age of the new startup company, plus its non-existent or minimal performance record, plots — via less than perfect circular reasoning — to produce this terrible set of circumstances: The startup business is constrained when it wants to develop new product lines, manage growth, and achieve market dominance — to present a better track record — because it doesn’t have access to dependable ways to raise capital, and it can’t procure access to good capital sources because of its short performance record!
All the above begs for this question: How can any company, be it public or private, set itself free from the above financial limitations, and raise the capital that will allow it to take the next step in its business life? The less than optimal choices to raise capital, and in particular for start-ups, is not new to company founders, corporate directors, and other company officers; all have been exposed — to some degree or other — to the capital-raising paradox. The steps they took to overcome its limitations to company growth and expansion is the subject of this study. Your new business enterprise can overcome the above capitalization catch-22 and achieve great results! Here is a preliminary guide to help your company raise capital:
(a) Join business incubator focus groups, discussion groups, advisor boards, community business organizations, business development groups, business roundtables, professional business forums, local fraternal business chapters, and business blogs.
Seek the advice and tutoring of the older, more Kapital och finans experienced CEO or CFO. This is such a golden opportunity on account that these older executives offer a lifetime of practical experience to share with younger upstarts; your company will benefit greatly from their generous business know-how and experience.
In addition, although the retired executives are no longer actively running their own companies, they enjoy assisting younger, up and struggling corporate officers because — in a vicarious way — they get to relive the romanticism of their younger “glory days,” and that is one of the reasons they are glad to help, and keep abreast of the action.
(b) Get your business plan ready! You should produce a well written and insightful business plan, since it is one of the most essential tools employed to raise capital. Few things are more essential for your company’s capitalization search than offering your capital funding sources a thoroughly researched and meaningful business plan. The presentation should get across your strategic corporate planning, the avenues your company intends to seek to grow and expand, and your general business experience.
However, the most vital part of any business plan is to appraise the proposed target — the investment advisor that may consider it — how your corporation will use the capital. What are the development steps your business is going to put in place to use the new capital? Remember to review and revise your company’s business plan as the need arises; it should reflect any new business opportunities, and pertinent information about the market outlook of your company.