David Spreng is a seasoned enterprise and progress debt lender with 30 years of expertise, the founder and CEO of Runway Progress Capital, and the creator of All Cash Is Not Created Equal.
Cash, like all the things else of worth, comes at a worth, and figuring out how and when to boost capital in a method that ensures the long run safety of a enterprise generally is a tough downside for entrepreneurs. There’s no one-size-fits-all answer, and the hunt for cash will be like strolling a tightrope: one unsuitable step will be deadly.
Entrepreneurs navigating the later phases of a startup face a minefield of funding choices, and never all of them are appropriate for his or her enterprise. I’ve seen too many sensible and hard-working entrepreneurs find yourself with too little, so it’s essential to know the totally different financing choices obtainable to you.
Because the founder and CEO of Runway Progress Capital, I’ve had the pleasure of working with a whole lot of startups (giant and small) and witnessing the wide selection of funding choices obtainable to founders. This record consists of practically 50 expertise and healthcare firms with 18 IPOs and 14 commerce gross sales. By all these experiences, I’ve seen how impactful totally different types of financing will be for firms at varied phases of their life cycle.
Funding a late-stage startup
The disparity in what totally different types of financing can imply has profound implications for founders, but too little is thought about them.
Sometimes, late-stage or growth-stage startups are firms which have already progressed via the preliminary phases of growth and at the moment are trying to scale. In case you’ve reached this stage, you’ll have a confirmed enterprise mannequin and a strong basis and could have moved past the purpose of product growth and market validation. Congratulations! This can be a large achievement and makes your corporation a sexy alternative for traders.
Nevertheless, now that you simply’ve gotten additional alongside in your journey, the funding fashions that will have been appropriate for elevating capital on the seed or early phases of your corporation could now not be the most suitable choice for financing extra progress. The disparity in what totally different types of financing can imply has profound implications for founders, but too little is thought about them.