What is the difference between Growth Capital funding and Seed Capital funding?

Published: 29th October 2010
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Growth capital is used when companies are looking to get funding. Most investors prefer to give growth capital funding to a business over seed capital funding. Seed capital is used more by businesses that are just starting up. There are greater risks in investing seed capital into a business that has no business history or customer sales. Not even a good business plan can get you the funding you may need. Investors are choosy because it is their own money they are outing up for your business. If you fail, they are out the money and will most likely never fund you or your business opportunities again.

Growth capital funding is sought after by a company that has been established for a while. Usually these companies just want to expand their horizons. Branching out to other cities or states or wanting to expand on their existing location is generally when growth capital is needed. Angel investors, hedge funds and venture capitalists feel more at ease funding a company when their explanation for funds is based on growth. Assuming there is relevant facts to back this claim up. The companyís management team generally uses factual data to back up what they are claiming and to get the money they need.

Seed capital funding is something that is hard to come by. Most investors will not take such a big risk and invest in a company that is just starting out. When your business has been around for a while and you have some corporate credit built up, more investors will be open to the idea of helping your company grow and expand by investing in it. The more growth capital you can get when your business is ready, the better. It will mean more chances for you to expand your current location; branch out to other cities or states and make your company a better place to work and invest.

Having great corporate credit will get you ahead in your business life. It will open the door to many different types of investors, loan institutions and other financial opportunities you didnít have at the beginning. Doing everything you can from the start to ensure your corporate credit stays good and grows is a must. Never use your personal credit for your business. Keep them separate at all times. This ensures that your business will never suffer because of your personal life and that your personal credit will be good for any loans you may want.

Corporate Credit Concepts specializes in helping educate business owners how to build business credit . Feel free to visit their home page for more information: http://www.corporatecreditconcepts.com.

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