Mailchimp sold for $12B in 2021 without raising a dollar of venture capital. To help you discover alternative ways to fund your business, we asked small business owners and entrepreneurs for their best advice. From building client relationships to crowdfunding, there are several ways that may help you grow your business without venture capital.
Build Client Relationships
A strong commitment to serving your customers and addressing their needs will always help a business grow. From retail to interior design services, top customer service contributes to a company’s word-of-mouth referrals more than anything else because clients remember how you made them feel and tell their family and friends. Once you’ve built solid client relationships, ask directly for reviews to help boost your online presence.
-Alisha Taylor, Alisha Taylor Interiors
Seek Out Alternative Funding Partners
Consider seeking out alternative funding partners or tools. For instance, why not give crowdfunding a try? If you have a product that you would like to develop but lack the necessary funding, you should consider funding communities on Kickstarter, GoFundMe or Indiegogo to raise money. Keep your backers regularly updated, provide incentives in return for their contributions, and they’ll become a resource you can tap into again in the future!
-Vanessa Molica, The Lash Professional
Support from Family and Friends
The truth is that you don’t need to be backed by venture capitalists to pursue growth and success. You have many means at your disposal, including your own greatest resources, those being your family and friends. There’s no shame in asking those closest to you for financial help that could make the difference between a successful project launch or your business’s failure. They’re already on your team, so to speak, so why not make it official?
-Chris Abrams, Marcan Insurance
At Curricula, we did not raise any venture capital for almost our first five years in business. And unlike the majority of other SaaS founders, we did not have angel investors or seed funding. I believed in our mission so much I literally put everything I had on the line to continue the growth of Curricula. I cashed out my 401K and sold my condo. Our journey continued, and along the way, we just kept building. We knew the direction we were heading in but didn’t know exactly how to get there. We wore many hats with a foundational team, which I think is the definition of being resourceful. The Curricula founding story has been slower than most startups, and that’s okay for me because we took our time to make sure we got this right. It’s been an honest journey fueled by hard work and the desired focus to change the norm.
-Nick Santora, Curricula
Become Part of a Community
Developing meaningful relationships with the community so they can reach out to you at any time pays dividends. If you care about your clients, they will care about you too. By working to achieve a strong sense of community, you can acquire numerous referrals helping you to remain customer-focused, stay lean on costs and leverage your client relationships to gain more business.
-Stewart McGrenary, Freedom Mobiles
Partnership marketing can help a startup grow without venture capital. Businesses in their early stages will highly benefit from their associations with a more prominent brand. This could come in the form of cross-promotions, event sponsorships, product placements and many others.
Through partnership marketing, startups can garner attention, draw in a bigger and broader audience and eventually reach their market. With the opportunity to introduce themselves effectively to the market comes an increase in sales, improvement in margin and the ability to scale moving forward.
-Michelle Ebbin, JettProof
Establish Brand Authority in the Industry
One way to grow your business effectively without venture capital is by establishing a brand authority in the market. Focusing on building brand authority is critical in forging trust and loyalty from consumers. By sharing relevant information and knowledge on related products and services in your market, customers become more inclined to consider your brand credible in the industry. It also helps accelerate the growth of your business without venture capital, and it bolsters your brand identity in the process.
-Arthur Iinuma, ISBX
Join a Business Incubator
Joining a business incubator program can help your business grow without venture capital. This way, you can access equipment and office space for free--or, if not, at a more affordable cost. More importantly, you get to forge deeper connections with mentors, industry experts and other startups who can help get your business off the ground. While there’s the possibility of meeting VCs and angel investors in incubators, it’s all up to you whether to take their offer or not, should they approach you.
-Abe Breuer, VIP To Go
If your aim is to aggressively pursue growth, consider crowdfunding as a VC-free option. With the right marketing, advertising, PR and a product that meets consumer needs, entrepreneurs can see huge returns in both funding and brand awareness. Crowdfunding is an avenue that continues to explode, and it allows entrepreneurs to stay fully in control of their business, its aims and values and the rate at which they scale. The different investment options that crowdfunding offers - donation-based, rewards-based, etc. - help increase the likelihood of success. Though it can feel like a frightening all-or-nothing risk, that's the nature of starting a business, and with the right strategy or agency with the right expertise, the rewards can be massive.
-Roy Morejon, Enventys Partners
This story was written by Brett Farmiloe and originally appeared on Score.org.