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If we need capital and VCs are not an option, what alternatives should we consider?

Answers

Bryan Frey
Title: VP Finance/Corp Controller
Company:
(VP Finance/Corp Controller, ) |

Angelist and Second Market are both options many early (very early) stage companies are using with some seeming degree of success.

Topic Expert
Kent Thomas
Title: Founder
Company: Advanced CFO Solutions
(Founder, Advanced CFO Solutions) |

You have to determine the owner's ultimate goals before you can establish or implement a financing strategy for the company. If your company has the potential to provide a "venture return" due to its products/services, market potential, management team, etc., then you may determine that raising equity capital is a viable option. Such a company will find that people who know the management team and owners (friends & family) are the most likely to invest in a very early stage enterprise followed by angel investors (high net worth individuals who invest in businesses as part of their retirement planning or "giving back" strategies). Most states have angel groups who work together to find, investigate and invest in smaller businesses. You can find such groups on sites like gust.com & angelsoft.com. Good Luck!

Topic Expert
Simon Westbrook
Title: CFO
Company: Aargo Inc.
( CFO, Aargo Inc.) |

It is not clear whether the reason for VCs not being an option is becasue the business proposition does not fit the VC profile or valuation expectations, or because the current owners do not want VC influence on the business management,

In addition to the F&F, angel and social networks, another possibility is strategic parters. This may include businesses that might have value for your IP or products including those who might eventually be interested in an M&A option, sales channels, and sellers of complementary products that could be bundled for added value or marketing reasons.

Topic Expert
Mike Rose
Title: Managing Director
Company: Montage Capital
LinkedIn Profile
(Managing Director, Montage Capital) |

If a company is generating revenue, it can often get a loan to satisfy its capital requirements. Loans come in many forms and are provided by a plethora of vendors, including banks, venture debt funds, specialty finance companies, etc. Prior to commercialization of product or service, a company will need to raise equity, so the other contributors to this post have already mentioned some good ideas in that regard.

Gary Honig
Title: President
Company: Creative Capital Associates Factoring Co..
LinkedIn Profile
(President, Creative Capital Associates Factoring Company) |

It is important to remember that "capital" is a tool for business. The same way a carpenter shows up on the job with their tools. He may pull out a saw to cut a piece of wood, but that saw would be useless trying to fix a leaky pipe.

So, as Mike mentions, you may find many capital related tools available, and plenty of resources to help understand which tool best fits the right business situation. Be advised, this is critical because picking the wrong tool could actually be worse in the long run.

The question begs much more information for a qualitative answer.

Topic Expert
Edward Abbati
Title: Vice President of Finance
Company: Location Labs
LinkedIn Profile
(Vice President of Finance, Location Labs) |

Venture Debt is definitely an options but any funding from VD firm should be focused on sales and marketing growth and not funding of development.

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