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Best Growth Strategy - Loans, Grants or VC's?

by blindmonk, Window Shopper

  • Created: August 2, 2010, 6:19 am
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2 comments

Hi!

I co-own a small business that is just getting started, but it is of interest to outside investors and - my own belief - has a lot of potential. It's a web-application 500px Photodigest, which allows photographers to create online portfolios. We have features that other competitors charge 5-to-20$ per month. It's a new field, but has a lot of players already.

Anyway, we have a steady growth, and very tight community. To grow better and faster, we need external money.

The question is: What's the best option to attract money without losing much control and having personal liabilities (it's Incorporated)?

We are pretty picky about losing control since we founded it and wanted to be able to work as we did before, and that's why we realized that we have special solutions to financing.

PS: We are a Canadian company, but I'm sure most of your advices (any input is appreciated) will apply to us as well.

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Tags: Discuss Popular Topics, Loans & Grants
‹ Grants or loans for new business Inquiry ›

JimD | Former Moderator | 8/2/2010 - 6:24 am

blindmonk, Between Loans, Grants, or VC, I believe your best bet is with loans if you do not want to give up control. A VC will want some control in return for their investment. Grants will be very difficult to come by. I am not familiar with Canada's methods for grants, but the US government does not give out grants for starting or expanding businesses. There are specific qualifications that need to be met. Loans will give you debt, but you will continue to have control of your company. Take a look at the Business.gov's Financing page. Anther good article to read is I need Money, Where do I get it. JimD

BizResearcher | Window Shopper | 8/3/2010 - 8:59 am

Show Replied Text…
blindmonk, Between Loans, Grants, or VC, I believe your best bet is with loans if you do not want to give up control. A VC will want some control in return for their investment. Grants will be very difficult to come by. I am not familiar with Canada's methods for grants, but the US government does not give out grants for starting or expanding businesses. There are specific qualifications that need to be met. Loans will give you debt, but you will continue to have control of your company. Take a look at the Business.gov's Financing page. Anther good article to read is I need Money, Where do I get it. JimD
Venture capitalists and angel investors invest in only a few businesses, primarily those that have developed a new technology, are expanding quickly and will be able to return the investment plus interest in a short time. They also require that they take a position within the company or on the board of directors. Therefore, as JimD mentioned, loans are probably your best bet.