You have a great idea, but to you really grow the business, you need money. So time to look at corporate finance. Your startup is only in the Valley of Death and is not making a profit yet. 

In principle, a limited starting capital of €100,000 to €250,000 is sufficient to break even in the foreseeable future. At the bank they just don't exactly welcome you with open arms and you don't get a foot in the door with well-known funds either. 

Now is a great time to look to BFFs, Angels, and Clients for your business financing. 

The power of business finance BFFs

Funding-by-friends-and-family

You may have heard of the abbreviation FFF in the world of corporate finance. This means Family, Friends & Fools. We prefer not to use this term; nothing is as inferior as classifying an investor as a fool. 

You may only know the abbreviation BFF from American series. But in our field it doesn't mean best friend forever. 

BFF stands for Believers, Friends & Family. The fools make way for believers in this abbreviation, because that is what these investors are. They believe in you and your product or service. They know they are taking a risk, but still believe in it and are willing to take it. Does that make them stupid? No. 

If you start collecting money from BFFs, it will have a positive impact on one subsequent funding round. Serious investors consider it important that you have 'skin in the game'. So you have something to lose yourself. It gives a wrong impression if you don't dare to run a financial risk yourself when starting your own company. 

If this is not possible with your own resources, it also radiates confidence if you have managed to make an arrangement with BFFs. A convertible loan, in which you also run a risk, is a good example where you have 'skin in the game'. 

Just be aware of the risk you run of leaving your BFFs with losses. Never risk friendships or family ties; make sure you make good agreements and share the risk. 

Business angels as a savior for corporate finance

angel investor example

is becoming more and more common seed capital financed by business angels. A business angel is often a (former) entrepreneur who wants to help other entrepreneurs realize their growth ambitions. On the site of the Association Business Angels Network Netherlands (BAN) you will find hundreds of Dutch angels who can add a lot of value to your plans. In addition to capital, a business angel usually also contributes his or her knowledge and network, which is at least as valuable. 

It is therefore always advisable to find a business angel who understands what you do and who can be a driver for the growth of your company. 

Ideally, the business angel can help you with your first clients or a strategic partnership. This is really worth gold. 

Let customers or partners finance your business growth

Family and friends invest money

Successful startups don't need corporate financing in the form of loans, equity offerings, or BFFs. Their growth is financed by new customers or partnerships. 

Often the income from these first customers is too low to finance growth.

In that case it is valuable to look for strategic customers or partners who want to (pre-)invest in your company. Make agreements about the growth of your startup with these strategic customers or partners and let them benefit from your intended success. 

As a starting point, it is crucial to create a win-win situation for both parties. You will really need your shares in a later financing round. 

Another great advantage of strategic clients or partnerships is that the reference value is enormous in these subsequent financing rounds. Therefore, be sure to take the time to look for strategic partnerships and customers.