Widget sales are booming -–
competition is scrambling, demand is up, and books are finally treading water. Your core management team has big ideas for future of Widget Inc. Opportunity is abundant; but how will you fund that next big leap? As your start-up matures, obtaining second- or even third-round funding may allow your business to expand and grow into new opportunities identified after your business was established. If your product or service has proven itself in marketplace, you may be a candidate for an additional round of funding.
Some possible uses of post start-up funding include:
* Penetration of new markets, either by industry or geographic location * Development of new products or services that compliment your key lines of business * Acquisition of competitors, staff and/or facility expansion, or new equipment
Damage Control
If your company is struggling to make ends meet, post start-up financing is not an effective way to address red ink.
Consider other methods of debt management such as refinancing, streamlining systems of production, and bootstrapping before looking for additional funding. Investors will not be interested in extending additional funds to companies that have not yet established themselves firmly in marketplace.
Identifying Post Start-Up Funding Sources
The best source for post start-up funding may be your original investment partner. However, sometimes asking your investor-partner for additional funds can be a lot like asking your parents for a raise in your allowance. You’re going to have to really prove a need for it, and even then, your original funding source may have woke up on wrong side of financial plan.
