Is high growth a blessing or a curse? How do you know which strategy is right for you?
In this week’s episode we were lucky to chat with James Sampson, founder and CEO at FileInvite, and founder and director of Zyber. FileInvite recently raised an additional $2.3M, bringing their total to $4.5M so we couldn’t think of a better person to discuss raising capital for growth with.
There are a plethora of capital growth strategies you can adopt as a business owner and it’s important to consider your micro and macro environments. James shares with us his personal experience of raising equity funding through angel investors, the comparisons to Shark Tank and offers advice for how a business owner can prepare for a pitch to investors.
Watch or listen to this episode to find out about other methods for raising capital and how to prepare for a pitch.
Capital growth strategies.
Bootstrapping: Put one foot in front of the other. This approach is self-funded through personal finances and then re-investing your operating revenue. If you have time, this method maintains complete control and lowers financial risk, however on the flip side, you might need to move faster to outrun competitors.
Debt: While there’s a higher financial risk, borrowing is the cheapest and fastest way to grow at present with low interest rates.
3Fs: This method involves borrowing from someone who knows you credibly. This could be from Family, Friends or Founders.
Pre-sale: This method is often overlooked. You can look to pre-sell stock you are selling as a merchant, and use the advanced profits to grow while you deliver on your orders. Additionally, a bonus of this method is you can use your existing database.
Crowdfunding: Especially effective for B2C brands. Crowdfunding involves raising small amounts of money from a large number of people. Also crowdfunding offers great marketing for your brand as you get an army of advocates with a financial interest behind you. Find out more about Snowball Effect here.
Equity funding from investors: The issue of new shares in exchange for a cash investment. This progression typically starts with angel investors. It’s all about presenting an opportunity:
- Define an existing problem – why is your business required?
- Solution – why is it a credible story? Be unique and not repeatable.
- Paint a clear picture- how will you gain traction? Know your numbers and your goals.
- Competitor background – know who they are and how your business differs.
- Team – who’s on your team? Highlight their strengths.
- Ask – how much do you want? Highlight what the return might be.
Find out more about Angel Association New Zealand here.
