Go, Go, Go!

I imagine would be the overall feeling for a start-up company about to launch. But taking things back a few steps, how does a start-up company well...start? In today's world, traditional methods of finance are only some of the sources of capital funding available (or not, as the case may be) for a shiny new trendy company, with entrepreneurs assessing the somewhat funky left field options available....

Angel Investment

The name says a lot. This is where a wealthy individual provides capital funding for a new business and in return they may receive equity in the company or convertible debt (type of bond that converts to a specified number of shares in the company). Companies that have Angel investors - and last more than 5 years - are definitely ones to watch out for. So the Angel will take on very very high risk and therefore will seek high returns on their investments; typically sourcing investments with return potential x10 more than the original investment amount (although some suggest returns should be much higher than this when sourcing) over a minimum 5 year period, with a clear exit strategy.

Bootstrapping

Yep, no joke. And to those of you from a statistics and econometrics persuasion it is not the term used in those disciplines...and having studied it myself, I feel your pain (yield curves anyone?).

So this is where a new company grows via cost control and cashflow generated with no external help or capital funding, allowing it to focus on customers rather than shareholders. Sounds simple in concept right?

Crowdfunding

Basically this is when lots and lots of people help you out. This is a method of raising capital via small amounts of money invested by large numbers of people usually via an online platform that acts as a moderator. What is the benefit for the investors? well either equity or rewards e.g product royalties.

Initial Coin Offering (ICO)

A controversial method of financing that is unregulated. It is a type of crowdfunding using cryptocurrencies, where a quantity is sold to investors in the form of tokens in exchange for legal tendor or other cryptocurrencies such as bitcoin. They are sold with the promise of future profit however bottom line? no industry regulation in place and around 50% of ICO's sold in 2017 failed by Feb 2018 (and they remind me of monopoly money and if you played this with your siblings, we all know about board games cheating...).