Widget sales are booming ? the competition is scrambling, demand is up, and its books are finally treading water. Your core management team has big ideas for its future of Widget Inc. Opportunity is abundant; but how commit you fund that below big leap?
As your start-up matures, obtaining second- or even third-round funding may consent your big idea to expand and bloat into new opportunities identified after your business was established. If your product or service has proven itself in the marketplace, you may be a candidate for an additional round of funding.
Some possible uses of post start-up funding include:
* Penetration of afresh markets, either by industry or geographic location
* Development of new products or services that compliment your key lines of business
* Acquisition of competitors, staff and or command expansion, or new equipment
Damage Control
If your troop is struggling to prepare ends meet, post start-up financing is not an effective way to address tropical ink.
Consider other methods of debt authority such as refinancing, streamlining systems of production, again bootstrapping before looking for fresh funding. Investors will not be interested in fluctuating additional funds to companies that credit not yet established themselves firmly in the marketplace.
Identifying Post Start-Up funding Sources
The best source for doorpost start-up funding may be your original investment partner. However, sometimes seeking your investor-partner for additional funds can be a dole fancy asking your parents through a raise in your allowance. You're activity to have to really test the need for it, and even then, your original funding source may have woke up on its vicious aspect of the financial plan.
Should this trot out to be the case, there are additional sources to consider, including:
* Lending institutions (banks)
* Venture capital firms
* new private investors
* Other professional service providers within your core management team
If you developed a list of potential investment partners prior to start-up, renew your contact with these individuals. By telephone or letter, convey the success your product or service has experienced, as well as your purpose for the post start-up funding. With a tenacious track record in hand, you may be astounded to find how prevalent potential second-round investment partners you have.
In addition, you'll be in the stronger position during the negotiation process, meaning you won't have to give hike through much govern to resolve your desired result.
Tips due to Maximizing pillar Start-Up Funding
* Don't commingle funds. Avoid descending into its trap of using new funds to smash the books. If you performed additional funding for expansion, resolve not deviate from the plan. Address any money flow problems or existing debt service exclusively from your company's expansion needs.
* Learn from recent mistakes. Undoubtedly, your company's start-up phase was a learning experience unlike any other. Recall the lessons learned from handling your initial start-up capital. for that you've established a strong working relationship, call leverage your management team to gather supplementary opinions upon the best way to disburse funds upon any project.
* Look through new opportunities along the way. As you implement your expansion plan, be on the lookout for ways to streamline and maximize the results of your efforts. Don't be fearful to upgrade your plan; remember which your animation plan should sell for a living document, able to flex as its status of your market also the general economy change.
Jim D. Ray is a seasoned entrepreneur and president of Web Presence, a national web design immovable exclusively powerful the small business market sector. To discover more, or for a free quote for your acquiesce web site, colloquy the trellis Presence web site at: web-presence| siteweb-presence| siteadditional topics: coffee drinker statistics
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