When an entrepreneur seeks to raise financial resources for his company, he has the opportunity to inject capital into his business for its growth. For this reason, fundraising is extremely important for all companies, whether for the resource to be used as working capital or to expand the organization (through the opening of branches or the acquisition of more modern equipment, for example).
For this, in addition to planning the real need for fundraising and where it will be invested when achieved, it is good for the entrepreneur to analyze different forms of fundraising, to make the decision that most aligns with the profile of your company.
Do you want to know the main ways of raising financial resources for companies? See 6 in today’s article!
Crowdfunding is collective financing, a kind of “virtual kitty” that brings together people who believe in your project. In crowdfunding, you register your project on a crowdfunding site, where it will undergo an analysis to find out if you can count on this service or not.
In case of approval, the goals, deadlines, and rewards for donors will be stipulated. If the goal is reached within the stipulated period, the entrepreneur will receive the funds raised. Otherwise, the amounts will be returned to donors.
2) Bring a partner
A partner is one who enters the business with capital to supply a need. So, bringing a partner into the business is a way of bringing resources indirectly to the company.
Generally, the partner is an excellent way to raise funds when you need someone to complement you in managing your business. When you are a person with a more commercial profile and need a partner with a more administrative profile to complement your skills, for example. Thus, the partner enters the business to grow together with the company and, therefore, is interested in a long-term return, disbursing the capital gradually.
3) Peer-to-peer loan
Peer to peer means point-to-point loan. This type of loan is facilitated by P2P (peer-to-peer) platforms, which are a type of credit fintech.
On one side of the loan, we have investors, usually individuals. On the other side, we have the borrower, which can be companies or individuals.
In the middle of the field, we have the P2P platforms, which offer an online service, so that the whole process is done through the internet, such as documentation and transfer.
Then, the platform interposes between the investor and the borrower. After the borrower pays the loan to the platform, it forwards that payment to investors.
4) Bank financing
If your company does not have a negative name, it can request bank financing to bring financial resources to the company using duplicate discounts, prepayment of receivables, or working capital, for example. Bank financing, therefore, is indicated to drive the business. Most large companies do bank financing.
But, if your company is at an initial level, it is unlikely to get bank financing. This is because companies with less than 2 years do not have a history considered by the bank, even if they have a good turnover. Generally, banks only give credit to companies after 2 years in the market.
Angel investors are essential in the business ecosystem. These are individuals who invest their capital in businesses that they believe have the potential to deliver a high return.
This investment is made with other investors, in what we call the investment round. These rounds can reach amounts of R $ 50 thousand to R $ 600 thousand, where each angel investor starts with a value of R $ 20 thousand.
Angel investment is very important for that phase when the company is validating its own business, trying to understand if it has a market for its product. The angel investment, therefore, helps in the realization of the company and its viability in the market.
The best angel investors, therefore, are those who offer smart money, which is when capital comes with experience, knowledge, and networking. The more the angel investor knows about being an entrepreneur and the market in which the company operates, the better.
To get an investor for the company, it is necessary to prepare a business plan, explaining where that resource will be invested, what is the return that the investor will have when the investment will start, and its possible exit. This is because investors hardly want to become partners in a company. Generally, they want to invest, looking for an exit after 3 or 5 years.
The translation of Venture Capital is Venture Capital and represents a high-profit, high-risk fund for investing in small and medium-sized companies. In addition to investing with money and capital in the company, in exchange for equity or equity interest, this type of investor can also offer smart money.
The difference between the angel investor and the venture capital investor is that the second type is more interested in companies that already have some size. So, a company that has grown little does not usually enter into venture capital, after all, these investors opt for businesses that already have significant revenues. The important thing to be able to attract resources through Venture Capital is to have a product or service well-positioned and validated in the market and to develop a detailed presentation of your company, showing your business niche, your way of operating, and your financial flow.
6) Launch an IPO
IPO means Initial Public Offering and it is a process in which a company goes through to have its shares traded on the Stock Exchange. The owners of the company define the percentage of the company’s capital that will be made available in the IPO and can obtain, through this offer, thousands of new partners and resources to invest in the company’s growth.
But why does a company IPO? There are several reasons why the company’s founders wanted this. By selling their stake in the company, they gain liquidity to invest the money elsewhere and diversify their assets.
Another reason is to get money into the company and be able to make the necessary investments for business growth. Raising funds in this way, there is no need to resort to bank credit, as interest rates are very high.