OPENING BUSINESS FROM SCRATCH

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If you are planning to open a business from scratch, already own one and planning to expand it in the future, you need funding source to begin with. This information provides useful insight into how to find the right venture capitalist to fund your business.

A bad economy can surely impact you in some way or the other. Your cost of operating the business as well cost of buying the needed equipment can go up. Getting access to the needed capital can become a Herculean task. People may take longer to pay for your products or services, and there may be many more obstacles when the needed fund is not available immediately. All these situations call for venture capitalists and their generous investments and donations. Knowing that an economic downturn will play a major role in the way you do your business is one thing. Having enough money to sustain growth, profit and expenses is another. Venture capitalists come into picture when you are facing a situation that is more similar to the latter case. However, you can weather this situation by using sound strategies to see you through.

“Capital or fund is king when it comes to starting or growing the business” – Jason Hope

A venture capitalist is needed when there is an absolute requirement to find money to weather the storm. Your business wants to reduce overhead, be productive consistently, recoup business losses and keep everything running smoothly. Capital or fund is king when it comes to starting or growing the business and having cash on hand at the right time will enable you to pay bills, pay salary, buy equipment and save for the future. In today’s economy however, money is tight and finding the right funding source is much more harder given the fierce competition in the market. This means the venture capitalists you are seeking and think as a great potential source of fund may use more stringent standards for making investments. They may consider only those businesses or entities that have the best credit, reputation and proven track record of success. The good news is that you can still get fund, the amount you get may be relatively low.

iStock_000008192243XSmall_crop A venture capitalist may be an individual or company ready to invest in your venture when the sun is shining, but wants to be a part of profit the minute it begins to rain. So, how do you know you have come across the right venture capitalist in such a situation? It may not be too late to find out so that you have the required fund waiting for you. If your credit or reputation is good, you are sure to find the investor. A great credit score can give you access to the money on time. As long as you have a good repayment history with loans or reputation among customers, gaining confidence of investors won’t be a problem. You may want fund for certain purposes, such as buying a new building or moving to another location. You can learn about various investors who are interested in such investments. Today, many of the major investors in places like Silicon Valley may be viable lending sources. They may have loosened their investment rules for good businesses like yours. However, small-time investors still have more stringent lending standards.