Venture Capital is equity finance. It allows you to raise capital by selling part of your business and can provide a solution for startups and new businesses in need of cash. It could bring you the funds you need, but it also has some serious drawbacks.
The worst is that you could lose control of your company. Venture Capital investment means that in exchange for cash, an individual or corporate investor takes a share in your company.
If being your own boss is one of your key reasons for starting the business, you may want to look at the alternatives.
At Rangewell, we can introduce you to alternatives to Venture Capital investment which could help you stay in control.
The top alternatives to Venture Capital funding
There are several other funding sources that you should consider.
Business Loans
Traditional bank loans may be difficult to secure, but there is a wide range of other lenders who can provide cash loans. Some may require security and often require a personal guarantee, but it is often possible to structure a loan with repayments that meet your business needs.
Venture Debt or Mezzanine Debt
Venture Debt typically is backed by assets of the business, while Mezzanine Debt is often a high-interest rate debt that may be convertible to equity in some business scenarios.
Commercial Mortgages
It may be possible to structure a Commercial Mortgage to provide funds for buying a property or a business, or to use existing property assets to release funds for any business purpose.
Asset Finance
Asset Finance is, basically, a loan to buy equipment and can be a relatively low-cost way to borrow as the equipment itself provides security for the loan. Asset Refinance can allow you to raise money by selling assets to the loan company, and repurchasing them with a Hire Purchase or similar agreement. You can continue to use the asset while it acts as security for the loan you need.
Invoice Factoring
Invoice Factoring could allow you to get an advance on your invoices it can be arranged quickly, in a fraction of the time it takes to arrange Venture Capital support.
What about the costs?
Remember, Venture Capital funding does not have to be repaid as it is an ‘equity’ investment, or a stake in your business, while alternatives that involve lending do. The cost of business lending has always tended to be higher than that for personal loans.
It is important to have a complete understanding of the costs involved before finalising your business plans. At Rangewell, we can help you understand the costs of various options to help you make clear financial plans.
Why you need our help
There are several alternatives to Venture Capital that you may want to consider, but you may face a major challenge.
As you are starting up your business you will have you have no trading history or accounts to demonstrate that your business will be able to repay a loan.
Fortunately, at Rangewell, we know that the lenders who can provide the funding you need to get your startup business off the ground, and how to approach them for the funds you need.
Call us now
As business finance experts, we understand the challenges you face and the options that are open to you. We also know the lenders who share our enthusiasm, who are most likely to help with new business plans, and who can offer the most competitive rates for all types of finance.
Coming to Rangewell means getting our expert team working for you and your new business.
We want your launch to succeed - and we want our financial expertise to provide an important asset for your future. We can discuss your objectives, and help find answers scaled to fit your business as it grows. When you call us, we can explain the options – and find you the solutions you need fast.
At Rangewell, we help all types of business find all types of finance, and we can find the most suitable providers for your new business. Call us to discuss your startup plans.