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Top 4 Investor Options Available to Startup and Expanding Businesses

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In our field, almost every client we work with is seeking some type of capital, either to expand their existing business or for an initial seed funding round.  Here is an outline of the investor options that are available to you.  For more info on the advantages and disadvantages of different funding options, see our Funding page.

  1. Friends/Family – Startup companies tend to have their best option in getting funding from their own contacts, including friends and family. This can come with much more flexible terms and can help an entrepreneur cover some of those initial expenses before the revenue or the larger funding comes in.
  2. Individual Angel Investors – This is the area that our team works with the most. Sure, it’s not as glamorous as raising money from a big-time VC firm, but the result is the same.  Most individual investors like deals in the $100,000 to $1,000,000 range.  In some cases, multiple investors will go in on a deal together.  These investors are typically very willing to negotiate equity terms.
  3. Established Angel Networks – Established angel networks have really expanded in recent years both in the number of deals they are doing and the dollar amounts of those deals. Typical deals stay in the $100,000 to $1,000,000 range.
  4. Venture Capital – Venture Capital funds have established processes in many cases and are generally looking at deals over $1 million. Deals over $5 million are preferred from many venture capital firms.

The right funding for you is dependent on a number of factors, including the stage of your company, how much money you are seeking, your realistic growth projections, and the management team you have in place.  And of course, the more connections you have, the better!

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