Businesses are often challenged to scale because they lack sufficient capital. While strong management expertise and a pathway to profitable growth also contribute to a positive growth trajectory, the right financial capitalization matters. Business owners can potentially increase their chances of financing, and at the very least expand the pool of options, by targeting capital sources based on affiliation. Owners can specifically search for sources of capital—debt or equity—from funders who have created vehicles targeted toward a specific market as a way to secure capital.
Below is a list of financing sources, ranging from loan and equity products to service companies and schools, that can help businesses secure capital based on a specific affiliation.
I have provided the list below as a starting point, which has a particular focus on some of the most current and prominent sources. As such, I have provided one major example per affiliation, largely in part because affiliation-based financing as a way to secure capital is still evolving. More importantly, my hope is that the list spurs you to conduct further research into financing options that meet your needs.
Your Alma Mater
Bulldog Innovation Group: A venture fund, Bulldog Innovation Group offers equity capital for companies founded by students or alumni from Yale University. Founded in 2015, the fund's investors are all Yale alumni. Armed with a philosophy of “Yalies investing in Yalies," the fund seeks to not only provide financing capital, but strong mentorship and access to the broader Yale ecosystem.
The Harriet Fund: An equity fund exclusively for underrepresented women of color, The Harriet Fund was founded by Maya Venture Partners. Launched in 2016, the fund is run by women of color who invest equity capital in high-growth companies led by other women of color. Using an investment motto of "overlooked markets, and untapped opportunities," the fund aims to provide business owners with the capital to scale.
Notwithstanding the above financing sources, some of which also are geographic specific, many traditional banks offer lending products for businesses located in the region where it conducts business. As a result, first check with local and regional banks in your area. Since traditional banks often have tight credit standards, resulting in a large loan declination pool, here are a few programs that focus on helping businesses achieve company growth, which is often a precursor to financing:
Business School Accelerators for Local Companies: Several business schools offer business accelerator programs, which provide extensive training on achieving growth and resources on financing, for businesses located near the business school. One successful (and long-standing) example has been the University of Washington Foster School of Business' Business Growth Collaborative program. Over the past 25 years, Foster's program has helped create over $100 million in new revenue and more than 100,000 jobs created or retained across Washington State.
Veteran Business Services: A consulting service created to connect veteran business owners to a wide array of financing sources, ranging from SBA (Small Business Administration) loans to private equity offering. Given their extensive partnerships with capital providers that specifically focus on veterans, this service helps veteran-owned companies navigate traditional and non-traditional places to secure funding.
Again, the above resources are a good starting point, and I encourage further research and due diligence to meet your specific needs. The barriers to securing capital can be different for women, minorities or military business owners and businesses located in specific geographies. What is the same, however, is that the private and public markets are responding with viable products and services to fill the gap.
Read more articles on raising capital.
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