Join me, Nicole Denholder, your scale-up expert and fellow entrepreneur, on our latest episode of the Raise the Bar podcast by NCR! Today, we delve into the crucial topic of understanding different founder profiles and the types of money that best suit each stage of business growth. Tune in to gain valuable insights and strategies to propel your business forward!
Join me, Nicole Denholder, your scale-up expert and fellow entrepreneur, on our latest episode of the Raise the Bar podcast by NCR! Today, we delve into the crucial topic of understanding different founder profiles and the types of money that best suit each stage of business growth. Tune in to gain valuable insights and strategies to propel your business forward!
Hello and welcome to another episode of raise the bar podcast by next chapter raise. We have a simple mission to get female founders money smarter, commercially confident, and funding savvy so they can grow their businesses beyond their wildest dreams. You can learn more at NEXT CHAPTER raised.com. We welcome female founders no matter what stage of business you're in, to join our programs, take our courses, and use our resources to become commercially confident and grow your business faster. Hi, I'm Nicole Denholder, your go to scale up expert and fellow entrepreneur and welcome to our raise the bar podcast by NCR. I've been in your shoes, and I know how challenging it can be to grow your business while juggling all your business responsibilities. My goal at NCR is help you unlock your full potential, and grow your business on an exciting journey to make your money smarter and commercially confident. On today's podcast, I wanted to cover a topic that we've been talking to founders about a lot recently, what stage is my business at and what money could help me grow? Now I totally understand the confusion around determining where you should focus your time and energy on growing your business. Part of this comes down to knowing how to work on your business and not just work in your business. And if you're not sure what that means, you can check out on our website, we've got an article that covers just that topic. So if you want to learn more about working on your business, the strategic side versus in your business, then go to our website next chapter res.com. And check out the article. But focusing your time and energy can also be helped by understanding what stage of business you're at, and what are the money and growth levers for that business. So what I'll do is start with the types of businesses that we meet all the time. And then I'll walk you through the types of money that can help businesses at those particular stages. So that allows, you know founders to be laser focused in using time and energy on the business. So generally, when I meet and get to know founders, I find they often fall into three general categories, which I have some nifty names for, firstly, the inspired startup, then our growth Explorer, and then what I call the focused fundraiser. Yes, now, I've kind of I know have these names. But let me explain what type of founder falls under those categories. So we start with the inspired startup, generally, these founders are taking the early steps on the business journey, and showing the curiosity and growth focus that, you know, we really see in successful business leaders and what they need, inspire starters have an idea and the energy, the focus the excitement to you know, get it off the ground and want that to happen. Now, I want to often meet inspire starters, though, what I see is that they're busy turning the idea from the problem they've identified into a business vision and a strategy. They're doing lots of market research and analysis, creating a product and service, identifying customers and how to go to market and deciding exactly how to make enough money to not just survive, but to thrive. So that sounds inspired, started, and I meet them a lot. And then I also meet what I call growth explorers, lots of founders here, and I especially meet them when we're talking about funding. As often, they're about to take the next step on their business journey and exploring different ways they can do that, including getting more money into the business. Now that doesn't have to be funding, but it's about getting more money into the business, which I love talking about. So of course, explorers have the basic business model and operations in place, a product or service they believe in, they've got traction in the business revenue, maybe not enough and resources in place. Yet, when I meet growth explorers, I also find they're looking for clarity on their business growth model. They want to feel confident in understanding what steps they need to take to grow their business, for example, improving product market fit, they want to move beyond being just a homegrown business that move from being a solo entrepreneur, to you know, the CEO, the boss, you know, have a thriving business. They want to be in a financial position to not only cover expenses, but build that thriving business. And often they want to understand what other successful businesses doing or have in place to really have succeeded, in particular, how they're getting more resources to support growth. And I love talking about that because It is so important. Then let me talk about the final group of founders that I meet what I call the focus fundraiser. And yes, that's all about money. That's all about external funding and focus fundraisers that I need to taking the next step on their journey. They're showing the curiosity and the focus on how can they scale up their business? And generally, focus fundraisers are talking about how do they get more clarity on their growth model for their business? You know, they often have an understanding of how scalability and repeatability is important to their business growth, because that's important to getting funding. They have strong metrics with lots of potential, they have this conviction in terms of skills and their team and goals. But how did they convert that into the right story. And they understand the commercial and financial aspects to running a business, but maybe not the fundraising cycle. So when I chat to focus fundraisers, they're often looking for or talking about better understanding of funding process, they're looking for money to scale the business, they want to have this balance of how do I give up some control of the business when I take an investor but while still being in control of the business, which is, you know, a tricky balance. They want to have this clarity and be comfortable managing investors. And they want to be comfortable managing the cash flow, the financial aspects post investment in their business. Now, these are just my categories that we find when we talk to founders. And you might be listening to this thinking you're just one of them, or possibly mix of two. And that makes total sense as you are in your own business journey. However, if you aren't sure which stage you're at, we have a great quiz, easy quiz to help you decide where you are in go to our website to take it. And that's it. Next chapter raised.com entrepreneurial explorer quiz. So that's next chapter raised.com entrepreneurial dash explore a dash quiz. So if you check that out from that quiz, we also give you a free gift basket with valuable resources to help you continue rolling and get money smarter. So what happens when you clearly know your business stage and you want to grow? Well, it makes it so much easier to decide what type of money options you can use to help grow your business. This will help remove the noise in the system and stop you spending time on the wrong money focus, especially if you are looking for outside capital. And let's not forget that our time is precious. And as our goal here is to make you money smarter, and more commercially confident time is key to that and being efficient with that. So what type of money can you use to grow your business? I mean, walk through the types of money that are out there. And what's best depending on the stage of business you're at, not all of them will apply to you. And maybe only one of them will. That's okay. It's about clearly focusing on what's right for you now, and for your next stage of business growth. Because the reality is that any money you have coming into the business, whether that's from business revenue, or external sources, is there to help you meet the goals you've set for yourself and business. And you've got to remember this future money will always look at how you manage today's money. So you need to show a good record on how you were using revenue or external investment now to prove that you're capable, or in a position to take on further money later on or future money. So I always say this future money always looks at how you manage today's money. So let's talk about money options by stage. So as I said, it's good to consider what's most applicable for you in the next 12 months, you know, how do you align the money against those business goals. So if we just start with the inspired starter, often the areas that are really useful for an inspired startup cover bootstrapping, which is using your personal savings. And typically when most founders start out that that's kind of dipping into your personal savings. Another way to go about getting money is talking to family and friends. And this is building flexible arrangements either around debt or equity. Now, if you do choose family and friends, to invest in your business, make sure you get some documentation in place because you really want to be clear about the relationship you're going to have not just about the money but in terms of your interactions once that money has crossed hands because these are friends as well as now investors in your business. Grants and government funding are another place to look and each country has their own specific programs. And often they don't need to be repaid or there's friendly terms or they can be very receipt based. So definitely Read the way that you have to either kind of report in on the money that you've taken out. So keep that in mind. Now, incubators are another great idea for inspired starters, what an incubator is and how that differs from accelerators. Incubators really are they're looking at disruptive ideas and how they build out a business model. And you particularly find, if you're a b2b business, working with corporates, they can often have corporate incubators, to help find ideas that will help them in their business, but also help a smaller business. So you know, incubators are they're really that early stage, and then rewards crowdfunding, which I think is particularly good for removing a gender lens. And that's pre selling your products, it's very good for product based businesses bit tougher for service based businesses, but possible. And that's a pre selling model. So that's really interesting for inspired starters as well. And you can really use it as a marketing tool as well as a funding tool. So we then look at the growth explorer, what's the type of money that growth explorers could be looking at. Now, obviously, everything that applies to inspired startup can work for growth explorer. But let's also talk about angel investors in Angel networks. And this is a step further than your family and friends investment. So angel investors, obviously an individual, and it's someone who you get to know you share your idea, your deck, you know, your stage of business, obviously, you would have some financials there, and they're really making equity investment in you. And it's obviously high risk, often, angel investors are investing in the founder, not necessarily the business per se, because it's very much depend on the founder being able to deliver on that. So building that good rapport is really important. Angel networks are groups of investors, and they're able to invest more money for equity because they come together, and investing as a group. So that's another great way in all most cities have their own angel investment groups, they often invest locally. So reach out and do some research around that. Loans, obviously, a bit for more established business with revenue streams or assets mean, you can should only get a loan, if you can repay it, you'll see that on bank websites. So keep that in mind. But loans can be a good option for a business that is able to pay it back effectively. And another new one that's come out around that over the past decade is peer to peer crowdfunding, which is a platform where individuals lend money to businesses. So there's the traditional banking, but there's this more alternative method of lending through peer to peer crowdfunding. So you can also look for those. Now I mentioned incubators, being different to accelerators. Well, where accelerators are great for growth explorers, is because it's focusing on scaling, a business's growth, you've done that kind of disruptive understanding of what you want the business to be. Now, it's how do you scale that up? How do you move fast, and that's where accelerators are really great for businesses that have some traction and are looking to just move that forward. Now, we mentioned reward based crowdfunding, which is three sellings. There's no equity, peer to peer crowdfunding, which is debt based. There's a third crowdfunding model called equity crowdfunding. And they're a platform for accredited investors to collectively invest in a company. So it's similar to that Angel Network model where you're getting investors as a group to invest. And they have definitely grown again over the past decade. And so you can look locally for those crowdfunding platforms. And last one, I think everyone hears this a lot is venture capital. And that's an equity investment from a venture capital firm. And that can be anywhere from very early stage to larger amounts. Because often, when VCs or venture capital firms investing companies, they do different rounds of investing, and then they start to called Series A, Series B, Series C. So you'll often see that and the numbers increase as you go through that cycle. Now, the trick about venture capital is often once you take in that funding, for the first time, it's often follow on rounds that come with that. So it's understanding the process around that. And that leads us into the focus fundraiser, because that's where you typically find venture capital and equity crowdfunding, very relevant for a business who is repeatable, who is scalable, who's looking for the growth metrics to get market share. So as I said venture capital, very much focused for the focus fundraiser and equity crowdfunding those accredited investors collectively investing loans, again, very applicable here in terms of you are in a position with particularly a company that has, you know, really solid revenue streams. The loan model might be better for you than the equity model. And then, you know, at this point There's also discussions around a strategic investor, you know that someone who is an investor who will be looking for more than just financial returns, but maybe in the same or related industry and is looking for other value to be obtained by investing in you. So they're really someone to look for. And final thing to consider here is a partial sale or joint venture, whether you're determining to sell the business or merge with another company, because coming together creates a better financial model for you. So I hope you now understand the different categories of business might nifty names, so whether you're an inspired startup growth explorer, focus fundraiser, and also the new clear on the types of money that can work with your business stage right now and in the future. So where are you now and what could you progress to? So, you know, don't forget, we're here to educate you on becoming money smarter, and commercially confident so you can become more successful. So, you know, please go check out our website next chapter race.com. To see our current programs and ways we can help you today. And thank you for listening. To connect with next chapter race, follow us on social media. Visit the website at NEXT CHAPTER race.com And subscribe to our podcast for more great stories to inspire and empower female entrepreneurs to become money smarter, commercially confident and funding savvy.