Keep your equity (and your sanity) while you’re growing your business

As an entrepreneur, we don’t have to outline for you how difficult the fundraising process is. If you’re a female and/or founder of color having difficulty securing capital, you’re not alone. 2021 data unveiled a glaring disparity: only 1.2% of U.S. venture capital was given to Black founders. At the same time, “Black women are more likely than any other group to start their own businesses, with 17% doing so.”

The VC paradigm is clearly outdated – but did you know there are alternative sources of funding you can seek out instead?

In a recent article by Fast Company called “Keep your equity (and your sanity) while you’re growing your business,” our CEO, Cheryl Contee, gives her two cents on alternative fundraising avenues.

Imagine a world where you didn’t have to give up a piece of your business just to get the funding you need. Revenue Based Funding (RBF) gives you that opportunity. Instead of decreasing ownership and giving a piece of your company’s equity, you can commit a percentage of your future profits. Once the cash starts flowing from your business, that earned revenue will be channeled back to your lender. 

Take Founders First Capital Partners (FCCP) as an example, a business in our direct network. Using the RBF model in their funding to early-stage entrepreneurs and underrepresented founders, their latest Market Report Executive Summary exhibits great success with their clients. 

It should be remembered that the RBF model is not suitable for every business. Nevertheless, it is a possible founding route to take for entrepreneurs who struggle to get the venture capital and bank loans they need to succeed. So pull out your laptop and notepad, do your research, and see if it's a viable step for your business to make! And most importantly, “believe that your hard work deserves investments to grow!”

Read the article here.