Many founders think they need investors to grow. This is a myth. I’ve built businesses that had venture funding, angel funding and no funding.
Here are 10 ways I’ve paid for growth without giving up any equity:
1. Startup phase: consult during the day to pay the bills, then build product at night
2. Have clients pay for new features they want before you make them available to others (this can fund beta releases)
3. Use Federal R&D Tax Credits for products built in the U.S.
4. Find workforce development funds or new hire incentives offered by your state
5. Apply for government or other grants (there are so many kinds)
6. Change your payment terms to collect a portion (or all) of the contract value up front
7. Get extended payment terms from your vendors
NOTE: The net of these last two will generate more monthly cash flow that you can pump into growth.
8. Barter for services you need (this is b-i-g)
9. Hire interns, some are available year-round; all are looking to build their resume
10. Get help from your family if possible (a family member who was a retired accountant did my bookkeeping early on)
I’m not saying you don’t need money. Getting an infusion of cash from an investor is oftentimes the only way to accelerate quickly.
But it is by no means a hard and fast requirement to grow.
Get creative, get scrappy.
Author: Raj Khera, publisher of MoreBusiness.com and founder/CEO of 3 businesses each successfully sold to public companies
