It seems start ups and traditional financial institutions are moving in opposite directions. Start ups have got game changing ideas, they are hungry for credit. But banks and other financial institutions have never been stricter with their financing parameters.
Frustrated by the traditional financial institutions’ policy of using unworkable metrics, which are often hostile to gamechanging ideas, entrepreneurs are exploring other options.
Still, crowd funding has a pretty big gap to fill. Entrepreneurs whose businesses may grow to become long-term customers are still facing the risk of chewing through vital operating capital and ending up closing doors and burying dreams within the first three years.
Thankfully, the availability of other unconventional funding options is also increasing, providing capital to entrepreneurs whose businesses may grow to become long-term customers.
$100 million Dell Innovators Credit Fund offers financing for technology products and solutions to newly venture-backed start ups. Similarly, Goldman Sachs’ 10,000 Small Businesses program is a $500 million investment to provide entrepreneurs with access to education, financial capital and business support services. Another is Google Ventures, which works with portfolio companies full-time on design, recruiting, marketing, and engineering.
These alternative lenders feel like they’re not only getting in on the ground floor of these innovative companies, but fostering their growth and having a true hand in their success.