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Fundraising is possibly the most pressing issue facing new business owners looking to get a startup off the ground. In this part of our MBA series, we take a look at some of the alternatives to the common, yet flawed, models associated with venture capital and angel investment. 

Both routes can be powerful tools for bringing in large amounts of money. But the less-talked-about risks and standard demands related to the sources of these funds can often spell big problems for the future of businesses grounded in a commitment to impact. In this episode, Kevin and Ryan discuss bootstrapping, non-diluted financing, the work that goes into fundraising, the main issues with venture capital, and the pros and cons of each of the available avenues. 

We also get to list the five steps to better explore your fundraising options and share some examples of what is possible. So if you want to gain an introduction to important concepts such as leveraging debt, revenue-based financing, impact investors, investment crowdfunding, structured exits, and more, make sure to tune in to this part of the ongoing MBA series. 

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Key Points From This Episode:

• Unpacking the venture capital and the 'business as usual’ approaches to fundraising. [0:01:49]

• Why venture capital and impact organizations often do not fit together. [0:09:03]

• Better options for investment for impact-focused businesses. [0:15:45]

• Expanding our understanding of potential capital for investment. [0:22:20]

• Philanthropic capital and lending options to consider. [0:27:10]

• Investment crowdfunding and looking to the community as a source of smaller amounts of capital. [0:31:50]

• Finding the right kind of impact investors for your project. [0:34:17]

• The benefits of structured exits and the terms that can allow owners to access these. [0:36:17]

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Tweetables:

“If they don't see that it has a multi-billion dollar opportunity, and they don't see the likelihood that there is an acquisition or an IPO in the future, then it's bad for their business model.” — @kevinbayuk [0:12:22]

“Almost categorically, venture capital is, because of its business model, not a good fit for impact organizations.” — @kevinbayuk [0:14:04]

“In terms of the potential investment capital that is out there, professional venture capital and angel investors is a tiny sliver of the capital that actually exists in the world.” — @kevinbayuk [0:22:25]

“Doing a financial projection and knowing in as much detail as possible, how much resource you need to thrive is actually one of the preliminary steps.” — @kevinbayuk [0:23:32]

“What is the leanest way I can actually test the hypothesis of what I want to deliver?” — @kevinbayuk [0:24:18]

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Links Mentioned in Today’s Episode:

The Next Economy MBA Course: https://go.lifteconomy.com/nextmba

The Next Economy MBA: https://www.penguinrandomhouse.com/books/717861/the-next-economy-mba-by-erin-axelrod-kevin-bayuk-shawn-berry-ryan-honeyman-and-phoenix-soleil/

Kevin Bayuk: https://www.lifteconomy.com/blog/tag/Kevin+Bayuk

Ryan Honeyman: https://www.lifteconomy.com/b-corp-consultant

Kevin Bayuk on Twitter: https://twitter.com/kevinbayuk

Ryan Honeyman on Twitter: https://twitter.com/HoneymanConsult

Jenny Kassan: https://www.lifteconomy.com/blog/tag/Jenny+Kassan

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LIFT Economy Newsletter

Join 8,000+ subscribers and get our free 60-point business design checklist—plus monthly tips, advice, and resources to help you build the Next Economy: https://lifteconomy.com/newsletter

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Next Economy MBA

This episode is brought to you by the Next Economy MBA.

What would a business education look like if it was completely redesigned for the benefit of all life? This is why the team at LIFT Economy created the Next Economy MBA (https://lifteconomy.com/mba).

The Next Economy MBA is a nine month online course for folks who want to learn key business fundamentals (e.g., vision, culture, strategy, and operations) from an equitable, inclusive, and regenerative perspective.

Join the growing network of 350+ alumni who have been exposed to new solutions, learned essential business skills, and joined a lifelong peer group that is catalyzing a global shift towards an economy that works for all life.

Learn more at https://lifteconomy.com/mba.

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Show Notes + Other Links

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Music by Chris Zabriskie: https://chriszabriskie.com/