Zappos’ CEO Tony Hsieh had the right idea when he said, “Chase the vision, not the money; the money will end up following you.” This is especially true in venture capital business banking, where exciting and even revolutionary ideas meet the investors who have the money to fund them.
Entrepreneurs who are looking for start-up financing already know how the right investor can turn an idea into reality. After finding someone to get the start-up running, the venture capitalists and angel investors are the ones who can ensure the business plan and model has everything it needs to turn into a success.
1. Equity Crowdfunding is the Future
Forbes recently covered the significant growth of equity crowdfunding as a source for start-up investment in addition to venture capital options. In the article, author Krishan Arora discusses how experts are estimating that by 2025, the crowdfunding market will grow by nearly $200 billion, at a compound annual growth rate of over 15 percent.
Arora notes that it wasn’t long ago that startups saw equity crowdfunding as a kind of last resort, and only something to consider if venture capitalists weren’t interested. “There is no crystal ball that allows us to look into the future,” he notes. “However, we do have access to cold, hard data from years of crowdfunding, and the upward trend is mind-boggling.”
2. Ecosystem is Everything
While non-traditional lenders are entering the venture capital playing field in droves, there’s one traditional rule that still applies. When you’re looking for a financial services partner, remember that their ecosystem will be influential in your future business growth. The network you gain through partnerships and financial services providers will be key to maintaining the forward momentum necessary when things like economic uncertainty, inflation, or other factors out of your control require you to adapt your business strategy.
Even with the uncertainty and disruptions brought about by the pandemic, 2022 still ranks as the second-highest investment year in history, according to Ernst & Young. The money is out there and investors aren’t all sticking to the old way of doing things, in large part thanks to the 2012 JOBS Act.
Venture capital firms have funded small businesses and startups for a while, but once the 2012 JOBS Act called Regulation CF passed Congress, the old way of doing things shifted. This piece of legislation opened up investment opportunities for non-traditional and essentially unaccredited investors who wanted to invest in startups and other private companies. Best of all, everything was government-sanctioned, as long as it was transacted via equity crowdfunding platforms.
Finding the Right Partner
B2B organizations are often influenced by their partners and business-related service providers. That’s why finding the right financial services partner who can offer expertise, along with an ecosystem strong enough to fund your enterprise, is one of the most important decisions you can make for your company moving forward.
The right banking partner stays up-to-date on the latest venture capital funding sources and provides that network to its clients to help them get the money they need to succeed in their business endeavors. The right partner is an expert—not just in banking, but in how to put you, the entrepreneur, in a network designed for matching the right investors with the start-ups and small businesses that can grow their money for them.