Question

You have a brilliant business idea which potentially can create the next ‘Facebook’. However, the initial investment amount is way beyond what you can afford. What would be your financing strategy to kick start the new business?

Answer 1

To kick start the new business my financing strategy will be focused on raising funds in the form of venture capital and funds from angel investors.

As my funding requirement is high and the initial investment amount is way beyond what I can afford raising funds from family, friends, loans from banks etc. will not serve my purpose in the long run. However financial support from venture capital and angel investors will be just right and will significantly help me.

I will have to pitch my business and my brilliant business idea to venture capital firms. These firms will provide significant financial support to me in exchange for equity in my venture. Besides the significant financial support I will also benefit from the advice and guidance that will be provided by venture capitalists. I will also seek funding from angel investors who are high-net worth individuals and who will be investing their personal money in my fund. The advantage of roping in angel investors is that they will hand hold me and will guide me with the growth and structuring of my business.