It is not unusual for a business to use a variety of sources of equity and/or debt funding.
Other sources of funding include:
- family, friends, business associates and other contacts may be the least expensive source of debt or equity funding. These may also be flexible and generous. However, such funding presents a special set of risks. Consider how you will deal with the issues if you are unable to meet their expectations.
- private venture capital services such as –
- syndicated funding which involves a network of investors and is typically organised by a lawyer or accountant
- 'business angel' services offered by some major chambers of commerce. They match well-managed, investment-ready companies with private investors who will receive equity or dividends in return for funding
- venture capital companies offering funding typically starting at $500,000 for start-up capital, growth capital or exit funding. In return they expect significant equity, board representation and an exit path.
For new business owners, it is highly advisable to seek legal and accounting advice on financing and equity choices.