How to Grow a Business When Venture Capital Ignores You
Here in Colorado, the Front Range seems to have an endless supply of startups, with big dreams and big potential.
Historically, the area has attracted a hearty supply of venture capital funding. Billions of dollars are invested into startups here every single year.
In fact, Colorado is one of the top states in the nation when it comes to the number of deals and the amount of money being invested by VC firms.
There’s just one problem. All that money and all of those startups means a whole lot of competition. And just because there’s a lot of money going around does not mean it’s easy to get.
No matter where you’re based, your startup may be unable to secure the venture capital you need to get off the ground. But that doesn’t mean you should give up. It just means that it’s time to get creative.
Finding the right partners. Networking like nobody’s business. Getting clever with your cash. Here are 5 quick tips for how to grow a business without venture capital.
- Generate Your Own Income: 5 Ideas
- Network Your Tush Off
- Check the Couch Cushions: AR/AP Magic Tricks
- Listen to Your Customers
- Hire Down & Up
1. Generate Your Own Income
The startup world is pretty obsessed with VC funding, and for good reason. It can be a really effective way to expand your company with money you have little to no obligation to repay. Venture capitalists can also connect you with other businesses and advisors that can help you identify potential partnerships, find guidance, and more.
But truth be told, there are a lot of other ways to find money out there.
Here’s just a start of some ideas for how to bring in some serious cash without venture capital:
- You can obtain a small business loan through a bank, apply for a low-interest credit card, or a line of credit.
- Typically, lenders will approve attractive loans for well-established, profitable businesses with a good credit score.
- Who would ever pass up free money? Billions of dollars are provided to businesses every year in the form of grants.
- These often come from government agencies tasked to support economic growth and help ensure that American companies stay competitive in certain fields, including technology, engineering, cybersecurity, etc.
- Many corporations also have grant funds to support small startups. Here’s a shortlist of some good grant opportunities for startups »
- Platforms like StartEngine allow startups to connect with thousands of small investors. Think of it like Kickstarter for investing.
- Individuals can find companies to invest in, and the companies can get the capital they need through crowdfunding.
- Networking may be your best shot to find an angel investor, but you might have just as much luck asking your parents for a little help.
- An angel investor is an individual investor who likes your company and wants to invest, usually for equity or convertible debt.
- The bonus is since an angel investor can make investment decisions on their own, they’ve got more flexibility than a VC firm, and may be easier to work with (although that depends on whether your parents are chill or not).
Pre-Sales Via Crowdfunding
- Crowdfunding sites like IndieGoGo and Kickstarter are great for companies with a product to sell.
- Often, the biggest financial hurdle for a new company is getting together the money to mass manufacture and package their concept.
- With crowdfunding, you can sell your product in advance, before it exists beyond the prototype or manually manufactured stage.
2. Network Your Tush Off
Did we just say tush? You bet your a** we did.
Networking is one of the keys for any successful business, especially right when you’re just starting out. Without a ton of money at your disposal, you need to get out there and hustle like nobody’s business.
The more people who work in your industry that you can develop meaningful relationships with, the better:
- Go to online conferences, online entrepreneur meet-ups, and heck, you can even cold call people you admire.
- Consider joining a virtual local incubator where you get to work alongside other like-minded entrepreneurs with a growth mindset.
Expanding your network means expanding your resources — it can provide you advisors, mentors, and perhaps most importantly, the opportunity for valuable partnerships.
Keep your eyes out for other companies with whom a partnership would be mutually beneficial. If you’re out to disrupt the chocolate industry, then find another startup who’s working to do the same thing in the wine industry. They go together, baby.
3. Check the Couch Cushions: AR/AP Magic Tricks
You probably won’t find enough change in your couch to fund your company, unless you own a lot of really big couches, and have lots of rich people crashing at your pad on the regular.
Outside of that unlikely scenario, what we’re talking about here is doing a little magic with your accounts receivable and accounts payable. You might just have some money sitting right there under your nose.
If you need to free up cash on-hand for investing in your business, this can be a good way to do so.
Look at ways to get paid faster by your clients, and slow down when you have to pay your bills. The longer you can hold on to your money, the more you can do with it.
Some strategies to review here include:
- Choosing vendors and suppliers that will allow you to wait longer before paying them
- Negotiating your existing contracts with both clients and suppliers
- Reviewing your supply procurement process
- Reviewing your invoicing, accounting, and reporting processes
This is work that a financial advisor or fractional CFO is perfect for — learn more about our fractional finance support services here »
4. Listen to Your Customers
Without VC funding, you’re going to need the support of your customers to survive. Get feedback via surveys and optimize your product and customer service to make customers happy.
When they’re happy, ask them to tell others about your business, and offer referral discounts or giveaways in return. As often as possible, get testimonials and reviews from satisfied customers, and promote the bejeesus out of them.
5. Hire Down & Up
When you find yourself slammed with tedious tasks that devour your time, look at hiring down. That means hiring someone that doesn’t have your unique skill set to do the busy work you need to get done. This frees you up to apply your skills where they’ll make the biggest difference in growing your company.
Simply put: the CEO shouldn’t be stuffing envelopes (although with a small startup, you’ll probably still have to do that from time to time).
The inverse of hiring down is hiring up, which is also an important strategy to utilize. When you find yourself spending hours doing something poorly, like say, your financial planning, look to hire an expert like a fractional CFO to take it off your hands.
Hiring up allows you to focus on the value you bring to your company, while putting important work into the hands of people who actually know what they’re doing.
Hiring up and down can improve efficiency and productivity, and increase the quality of your company’s processes. And more importantly, it’ll boost the sustainability of your workforce — namely, you.
Whether you’re stuck cleaning the office toilet or trying to wrap your head around your budget for the next fiscal year, doing stuff that sucks your soul dry and takes up all your time is a solid path to burnout.
You need to have energy to do the work that impassions you, the work that will take your company to the next level.
Grow at Your Own Speed with the Simple Startup Academy
Remember, growth is the goal. But fast growth is not as important as sustainable growth.
The Simple Startup Academy takes all of the tactics and growth strategies that Simple Startup uses to help our clients reach their goals and compiles them into a toolset that you can apply to your own startup.
Learn how to see into the future with financial planning and modeling, get the skinny on budgeting for growth, and more.
Plus, many of our business workshops offer live facetime with financial advisors and consulting CFOs who can help you strategize ways to grow your company and actually be able to pay for all that growth at the end of the day.