By William Lieberman, member of Entrepreneurs’ Organization New York and founder and CEO of The CEO’s Right Hand, Inc. In the first part of this blog, William shared how to assess your needs for capital and explains potential sources for raising it. Below, in part two, he explores the characteristics of debt and equity investments, ways to figure out which might work best for you and your business, and the importance of investor “fit.”
While it is possible to bootstrap a business using your own funds, many start-up and early-stage companies are faced with a decision: whether or not—and how—to raise outside capital to fund growth.
These funds may be necessary to hire new personnel, buy equipment, invest in product development, or even acquire a competitor. Whatever the reason, the fundraising process can be overwhelming for any entrepreneur who, in addition to ensuring that his or her company is properly capitalized, must continue to actually run the business daily. Not every entrepreneur has the depth of management that enables them to step away and concentrate wholly on fundraising.