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Why Raise Capital

You can either wait for your savings to accrue until you have enough money to launch your product or business or there may be times when you need to strike while the iron is hot, and launch a product right in time. By delaying until you have all the money saved, your opportunity might have already vaporised right before your eyes.

For those launching a new product, you need to invest in R&D, prototyping, development and production. For businesses developing online solutions, there are a large number of applications and tools to help you fast track your product development. If you don’t have the technical skills, then you need to either bring in a technical founder, form partnerships or find an investor to raise capital.

We all know launching a product is not enough. You also need to actively market and promote to your potential customers, and also build and promote to new distribution channels. This is one of the most popular reasons for wanting to raise capital.

Hiring staff is another major reason for launching a capital raising campaign. New staff hires can bring enormous value to your business with their previous experience, industry contacts, relationships with past clients and distributors.

Businesses raise capital at various stages in their lifecycle and many conduct multiple funding rounds including seed stage, expansion stage, and growth. There are also many types of funding options including equity, debt or a combination of both.

Raising capital should not be seen as the only solution. Among other things, businesses are built to make money. Having to constantly source capital is not the mark of a successful business. Therefore, it is important to put the capital you raise from investors to good use and build a sustainable business model with a strong competitive advantage.

There are many strategies that can be employed to raise capital. Of utmost importance are the milestones you set for your team and business. These help you determine what resources, including funding, you need to reach them.

The business model canvas is a visual chart that shows your business’s value proposition, infrastructure, customers, and finances. You can download a free copy of the business model canvas to help you determine the resources and funding you need to start and grow your business.

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Venture Capitalist Australia
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