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4 Ways to Reduce Your Cost of Venture ​Financing

4 Ways to Reduce Your Cost of Venture ​Financing

As the old adage goes, you need money to make money. It’s not any different for entrepreneurs looking for venture financing. With that in mind, take a look at these four ways to reduce your cost of venture financing.


1. Test Your Gut-Feelings Before you Launch

This is not to say don’t trust your gut, but rather confirm or deny your gut. Many entrepreneurs make the mistake of diving into the market based on a series of good feelings. Those good feelings can take you in the wrong direction and cost you a lot of money. If you do nothing but trust your instinct, you run the risk of making poor decisions, which in turns results in poor financing.

2. Adjust After Launch

You can do all the testing you want, it’s never going to fully emulate reality. Without a doubt, the best way to get true feedback is to actually launch, but with the ability to adjust where necessary.

3. Understand the Industry

Especially in emerging industries no one really knows the rules to succeed. The key is to create opportunities for you and your business to be flexible. Let it be known that the ability to improvise may be the difference between business shut-down and business success. If a formula for success is known, imitate it and improve on it. Finally in an established market, find the strengths and weaknesses of your competitors and seek out unmet needs of the marketplace.

4. Learn What you Need to Know

Most VCs prefer you, the entrepreneur, to have a team. A team insures investors that all the necessary bits of knowledge are covered internally. The obvious catch to acquiring company allies is cost — and not just salary. Perhaps those extra bodies have a handsome stake in your company. But if you are well versed in every part of your business, you have an opportunity to win the trust of investors without much cost at all.