Business Growth Capital
Business Growth Capital for Startup: Service Description
This service is part of our Raise Capital program. We help you get growth capital to finance the expansion and growth of your business. We help you get loan financing and equity financing through connecting you with the suitable loan providers, VCs and angel investors from our network. We also advise you on the right amount of growth capital to raise and equity to give up. We work on developing the right fundraising plan and conducting market research on your target market in order to have an insight and set strategies accordingly.
Business Growth Capital for Startup: Goals
- Raising growth capital for expanding and scaling your business
- Get equity investment and loan funding to finance your business growth
- Building a fundraising strategy that aligns with your growth plan
- Identifying the right form of funding based on your business plan and growth rates
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1. Business Growth Capital for Startup
Growth Capital is a type of funding that allows late stage companies to scale their business, expand their customer’s base and expand into new markets. Companies at this stage usually have positive cash flow and have achieved significant revenue. Business growth capital is a type of financial resources that helps businesses to grow and expand. It can come in the form of cash, loans, or equity investments from investors. The goal is to help businesses achieve their long-term goals by providing them with the financial resources they need to grow and expand their operations. Allocating business growth capital is an important part of success for any business. The right type of funding can help a company reach its goals faster while minimizing risk exposure.
Late stage companies usually seek equity or debt capital as their growth capital. Equity financing is the most common type of growth funding as the company is already generating revenue and has established its position in the market and this makes investors and VCs more encouraged to invest. However, some owners prefer to maintain ownership and control over their companies, so they work on getting growth capital through applying for startup business loans. Growth capital is for businesses with a proven track record that need to expand and scale up their operations. In order to know that your business is ready to get some growth capital, you need to have a stable financial position (positive cash flow and hit a breakeven) and a good track record that shows growth potentials. Usually investment in growth capital is less risky than other investments like in early startups because startups usually don’t have the financial and market stability that mature businesses have, but with growth capital investments the risk is only about the ability of the team to build a good scaling strategy. The right source of growth capital depends on certain factors of your business and your growth and fundraising plan. Long term growth and sometimes the high risk of the plan requires flexible and patient forms of growth capital like equity investment, while short term growth can be funded through loans.
We help late stage and mature businesses in raising growth capital from different equity financing sources, such as VCs and angel investors from our network. We don’t only connect you with VCs and angel investors that provide growth capital, but we also work on connecting you with ones that provide business expertise and growth strategies. In addition to equity financing, we can also help you get growth capital for your business from small business loans. We help you find the suitable business loan that fits your business goals. Since in the Raise Capital program we partner with you during the raising capital process, we help you set the best growth strategies and providing you with insight about your target market and how we can set strategies and milestones to expand your business there through our market research service in order to achieve your business objectives. We also offer our network of sales reps and sector experts.
We also help you identify the size of the growth capital raise and the source of financing based on your company’s balance sheet, cash flow and your targeted growth rate through our funding plan service as the selection of the right financing source for growth capital can only be achieved through a plan. Through the planning phase, we don’t only identify the funding source and growth capital to be raised, but we also identify potential risks, capital requirements and set clear timeframes and milestones.
2. The Types of Business Growth Capital for Startup
Mature companies always have different types of capital available due to their strong position and track record.
There are four types of Business Growth Capital for Startup:
Angel Investment
A small amount of money provided by individuals who are not actively involved in the business but want to see it succeed. Check out how we help startups in finding angel investors.
Convertible Debt
A type of debt that can be converted into stock at a discount if the company meets certain milestones or objectives
Private Equity
A type of investment in which high-net-worth individuals and families contribute money to invest in early stage companies. Check out our equity financing for startup service.
Venture Capital
An investment made by venture capitalists, who are typically wealthy individuals or groups, into early stage businesses in order to gain an ownership stake and receive dividends or other returns over time.
2.1 Raise Business Growth Capital for Startup from VCs
Venture Capital funding is a type of equity financing. They prefer to invest in well-established businesses that have a proven track record and enough traction, which makes them a good source of growth capital for SMEs. When it comes to growth capital investments, VCs are considered minority investors that play an important role in keeping the business growing and supporting the founders. With minority investors like VCs and angel investors, the business owners can be in control of their business unlike buyout funding which usually ask for a controlling stake in the business. VCs provide growth capital on large levels in exchange for equity. Equity can be a great source of growth capital if you are not interested in loan repayment.
Growth Capital VC is a form of venture capital that focuses on growth stage businesses. It is a relatively new form of venture capital and there is still much to be learned about it. There are a number of reasons why Growth Capital VC might be a good option for a business.
One reason is that Growth Capital VC is more willing to take a risk on a young company than traditional venture capital. This is because the goal of a Growth Capital VC is to help a company grow quickly and become profitable. This is often easier to do when the company is young and has few financial commitments.
Another reason Growth Capital VC might be a good option for a business is that it offers access to a wider range of investors. This means that a business can find a Growth Capital VC that has the resources it needs to help it grow quickly. Check out how we help startups in getting VC funding
Our network contains 5,000 VCs that invest in different types of startups, scale-ups and SMEs. We connect your company with the right VC based on your stage and industry. We perform a detailed research about several VCs i.e. their investment criteria and investment history to make sure they invest in late stage companies and their investment ticket aligns with the amount of capital you need to raise before introducing them to you. We introduce you to VCs through warm introductions that are based on shared connections in order to increase the response rate. Read more about our venture capital funding service.
We also advise on the right amount of equity you need to give up based on your company valuation through our funding plan service. In order to identify the right valuation of your business, we take into account your business key performance indicators, cash flow, revenue and track record. We also provide legal support in the negotiations phase and help you close the deal through our negotiations with VCs service.
Quick Tip
The key factors that determine whether or not business growth capital is appropriate for a given company vary significantly from case to case, but some general considerations include:
The size and scope of the proposed expansion.
The company’s stage (i.e., how far along it is in its development).
The company’s financial stability and past performance.
The terms offered by potential investors.
2.2 Raise Business Growth Capital for Startup from Angel Investors
Angel investors is another type of equity financing that can be a good option as growth capital for mature companies. Similar to VCs, they are also considered minority investors in the growth capital investment and they contribute to the overall growth of the company, providing business advice and business opportunities thanks to their expertise and connections. Although angel investors don’t invest large amounts of capital like VCs, it is important to have them as part of your growth capital funding sources due to the great impact they have on your company growth. Angel investors provide growth capital and long-term commitment. They can connect you with a wide network of customers and suppliers to grow your business. Angel investors usually invest as individuals or as a part of a group.
Angel Investors are individuals, companies, or other entities that invest in early-stage businesses. They are typically wealthy individuals or groups who are interested in seeing their money work as hard as possible for the company they are investing in.
There are many types of Angel Investors, but the most common are those who invest in companies before they have raised any outside capital. These investors are often referred to as “seed” or “angel” investors because they put money into a company as a “seed” round of investment.
Once a company has raised some outside capital (usually from venture capitalists), it is then able to attract more “traditional” investors, who are typically interested in taking a larger share of the company in exchange for a higher return on their investment.
There are many benefits to getting funding from an Angel Investor. First and foremost, they provide a much-needed injection of cash into a young business, often helping it get off the ground faster than it would otherwise.
In order to find angel investors you need to have wide connections and enough knowledge about where you can find them and contact them. Most angel investors (and VCs) don’t reveal their investment criteria in public. You can’t know exactly the industry and location of the businesses that usually invest in from their Social Media platforms. Same applies to their investment ticket. This kind of info is not communicated on the angel investors’ profiles. Also, approaching them through sending mass emails and messages is not an effective way and has a low response rate. We have a huge network of 60,000 angel investors. We help you get angel investment for your company through matching you with the right angel investors based on your company’s locations and industry using our AI system for matching. We have detailed info about the investors’ profiles like their investment history and ticket size gathered and built into our AI system. Our AI system can be filtered based on your business needs. We introduce you to angel investors through warm introductions based on shared connections. We help you identify the right amount of growth capital you need to raise taking into account the investor’s investment ticket. In order to determine the amount of equity you need to give up, we work on identifying the valuation of your business based on the market size and your business’s achievements and millstones. We also provide legal support in the negotiations phase and help you close the deal through our negotiations with angel investors service. Read more about our angel capital service.