How to Use Entrepreneurial Finance to Launch Your Startup
This site has gained quite a bit of notoriety over the years for two main reasons. One, the Startup Guide based on the financing strategies and tactics of elite entrepreneurs, such as those found on the Inc 500 Lists of Fastest Growing Companies, improves the entrepreneur’s negotiating leverage with investors by showing him or her how to quickly create traction without outside capital. Two, many entrepreneurs as a result decide to pass on investor capital altogether. Why give them equity if you don’t need them?
If you are the type of entrepreneur who places a high priority on preserving as much autonomy as possible, you will have an extra appreciation for this startup financing approach.
There’s nothing magic here. While rookie entrepreneurs expect one bundle of cash to be dropped in their laps that will then solve all their startup problems, the elite entrepreneur understands that the key to financing a new company is in breaking it down into balance sheet components such inventory, fixed assets, equipment, and working capital, and then finding a way to finance each one individually.
If you think that the startup financing problem is being overblown here, take note that it has a name: The Financing Valley of Death.
Even if you are committed to not starting until you have funding from investors, knowing these financing methods will enable you to impress them far more than someone who is oblivious to entrepreneurial finance.
Here are two financing tools to help you get started tomorrow:
Revenue-based Financing: This product covers in detail how to use revenue royalty certificates (RRCs) to finance startup or expansion of a business. Although the Internet just discovered revenue-based finance in 2010, it’s actually a proven method for raising capital.