Whether your small business is just starting out, or you’re looking for the funds to take it to the next level, it’s important to be aware of the alternative sources of funding available to you beyond the traditional small business loan options.
The world of funding for startups and entrepreneurs has changed pretty dramatically in the last few years. As has been the trend in the world at large, things have moved away from the one-on-one transactions and toward a more social model that leverages the viral potential of the Web.
The infographic below, created by Startups.co, illustrates this point along with some other interesting information about trends by industry.
Before you dive in, here are some definitions (courtesy of Wikipedia) that might be helpful if you have not done a lot of research yet into the funding world:
- Venture Capital (VC) is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in.
- Angel Investor is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks.
- Crowdfunding explains the collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organizations.
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