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Pursuing external funding for a startup: EU and US options

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Since the global pandemic of Covid-19, there has been a significant rise of startup LLC business structures in both Europe and the US. According to statistics and research, it may be established that business formation in both these world powers has increased since the 2020 financial year. However, starting a business, no matter where any specific entrepreneur is in the world, requires effort, dedication, and, most importantly, funding. 

Most business formation structures also require additional duties from business owners that may sometimes be overwhelming; for example, forming an LLC may have complexities and hassles due to the legal requirements and tax documentation. However, there are many digital tools to aid businesses in business formation. Business owners and aspiring entrepreneurs could do research on these tools and nominate the most suitable fit for their business model. Between the two most popular options available it would be viable for them to decide between a variety of services amongst those, and debate their options between either ZenBusiness or LegalZoom? 

Both the US as well as Europe have seen an influx of business startups in recent years; although most entrepreneurs may have incredibly successful startup and business ideas, there are many startup costs and ongoing business finances for business owners to take into account. Most healthy and successful business structures require business or startup funding. However, in the modern business sector, it may be understood that the need for financing options depends on what kind of business any specific entrepreneur has.

What is external funding?

External funding for startups may be explained as a source of capital or financial aid from alternative sources such as government agencies, financing programs, non-profit organizations, and bigger corporations. These organizations usually tend to have the advantage for business owners to secure financial resources for investment or improvements within or on behalf of a respective company, allowing for internal financial resources to be set aside for ordinary business expenses. 

Apart from financial gain, external funding may also open up other opportunities from organizations; aside from possibly gaining valuable contacts and associations, organizations who aid these startup establishments may offer useful sources of expertise and advice. 

EU external funding options

European entrepreneurs who could be on the brink of a successful startup venture may often not have the external funding to back up their business. For these aspiring business owners, investors and venture capitalists are possibly difficult to find and hard to get investment funds from since the economic recession that came along with the global Covid-19 outbreak. Although some European states offer entrepreneurial and business-related grant and funding opportunities, it may be wise to look beyond these government-funded opportunities and seek external funding as a possible means of preserving financial resources. 

Although private investors may be difficult to find, there may be public funding opportunities to seek or potentially assist entrepreneurial beneficiaries. Programs such as the EIC Accelerator focus on providing funding opportunities to businesses and startup ventures that seem to have a high potential idea that possibly contains marketable products or valuable services to drive the European economy forward. 

Aside from government-related small business funding opportunities, third-party funding opportunities such as personal bank loans and venture capitalists (VCs) may be noteworthy to fund businesses that may be a feasible option for entrepreneurs to consider.

US external funding options 

In order to successfully stabilize a startup business, entrepreneurs should understand that funding is a critical factor in making it past the initial problems that come with startup establishment. Although external funding may be a challenge for these entrepreneurs to seek, aspiring business owners should consider different avenues such as alternate funding opportunities. 

Although bypassing traditional methods of financing and funding may seem like a challenging task for US entrepreneurs and ambitious business owners, there are many opportunities to consider outside of conventional approaches.  For small businesses that require financing to get them off the ground, alternative financing methods such as crowdfunding and partner financing may be viable options to take into account. 

Crowdfunding on online platforms may be a possible option for business owners since it allows small investors to contribute to a pool of investment compared to a single investor. Partner financing may be explained as considering an additional individual in your business to act as a silent investor in exchange for becoming a part of the business venture. Although this option is often overlooked, it may be a good option to consider since it could potentially split the workload and improve business efficiency. 

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