As businesses grow, funding needs evolve. Funding a business through the various stages of growth is a complex process as it involves choosing the most appropriate source or a combination of sources (equity, debt, friends, and family, angel, PE, VC etc.).
Benefits of Investors
Involving external investors helps businesses in many ways:
- It brings in domain knowledge and technical expertise
- Opens up networking opportunities
- Provides strategic direction to boost growth
- Improves financial decision-making
- Instills professionalism
- Helps build credibility and reputation.
Companies require a well-structured leadership team to handle the corporate finance function. Strong financial controls and governance is the key. Further, companies that have external investors have seen significantly higher growth. They are better equipped to take more efficient financial decisions.
According to a recent DNA Money article, Private Equity (PE) backed companies have a 40% higher revenue growth over a five year period vis-a-vis listed companies without PE funding.
Like, comment below & share. What do you require funding for?
The 7 Growth Drivers to Scale Up Your Business
Here are links to the various Business Growth Drivers:
- Be customer centric.
- Develop a 2nd line of leadership that is independent & accountable. This is one of the biggest challenges faced by small business owners. Learn the 7 steps to successful delegation here.
- Use a total rewards mechanism to engage & retain talent.
- Segregate core & non-core business activities.
- Finance – This video
- Risk management.
- Technology – use it to strategically drive growth.