Founder of James River Capital Paul Saunders always had a passion for finance and his career has included roles in investment banking, as well as trading. Paul Saunders took his experience and passion for finance and started James River Capital. James River Capital is an investment firm in Richmond, Virginia, that focuses on asset classes, including multi-strategy investing, managed futures trading, and macroeconomic strategies.
With his experience in finance, Paul Sanders shares some of his tips on how entrepreneurs can fund a business.
For entrepreneurs just starting out, bootstrapping can be the best place to begin. It doesn’t fund the entire business venture but it can cover some of the start-up costs. Bootstrapping means funding the business through credit cards, personal savings, and borrowed money from friends and family. Investors are likely to contribute money if they already see that you have contributed yours.
Crowdfunding is a newer source of business funding and if you go this route, you need to market your idea to get people to invest.
Entrepreneurs can use a number of different business loans. You can get loans from the bank, the Small Business Administration, or a business line of credit. If you don’t have the best credit score, you can look at equipment financing to get the equipment your business needs.
Angel investors can be individuals who want to invest in a business idea that is promising. These investors can help with the loans and even host networking events to help you connect with potential investors.
Another option is trading equity, where you exchange stock in your company for capital from investors. You don’t get any debt and you don’t need to generate income quickly in order to pay back loans but you are giving up a degree of control and ownership in your business.
Paul Saunders’ advice is to think about the company that you want to create and decide which resources are best suited to your business needs.