Growth requires capital to invest in people, property, plant, equipment, systems and other resources. Getting this capital is not easy, particularly in the current credit-constrained conditions.
The main options to fund growth are:
- A loan from a bank or finance company. The traditional form of funding for a growing business.
- Angel investment. So-called business angels are entrepreneurs or former entrepreneurs who like to invest in growing companies, in returning for receiving a stake in the business.
- Venture capital. Venture capital funds invest in early-stage companies and hunt for big returns over a period of about five years.
- Private equity. Private equity funds invest in growth businesses that have been operating for a few years and are looking for capital to go to the next level. Will also look for an exit in three to five years.
- Government grants. Federal, state and even local governments provide various grants to help companies develop new products, exports and conduct research and development.
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