Should You Raise Funding for Your Startup

Before raising funding consider if you should raise funding for your startup.

Ask why you need funding and see if you have a specific need for funding tied to growing the business. 

If you have a business on a high growth trajectory, consider venture funding. 

If the business is not high growth or you have no vision of selling it, consider other forms of funding such as SBA loans or revenue-based funding. 

Investors expect a return in the ballpark of five times their investment in five years. 

Angel and venture capital funding go to those startups.

Other factors to consider for venture funding include the following:

You have a large addressable market.

You are building a business that is scalable.

You are using a recurring revenue monetization model.

You are building a platform-based business rather than a single product.

You plan to sell the business rather than keep it for a lifestyle business. 

Finally, you have built enough of the business to prove product and market validation — the product works and people will pay for it. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.