Match the capital to the purpose
Short term inventory, equipment, research and long term expansion may require different funding. Define the amount, use, timing and expected business result before approaching a funder.
- Calculate the full amount needed
- Set a realistic timeline
- Identify how the funding creates or protects revenue
Understand the major choices
Grants usually have strict eligibility and reporting. Loans require repayment. Credit can be flexible but expensive. Investors receive ownership or another economic interest. Crowdfunding depends on the campaign model and audience.
- Compare total cost
- Review guarantees and collateral
- Understand ownership and decision rights
Check affordability and risk
Prepare cash flow projections for strong and weak sales periods. Read every agreement and obtain qualified legal, tax or financial advice before accepting material obligations.
- Model monthly payments
- Keep an emergency margin
- Never rely on guaranteed approval claims