Company founders face an unenviable series of challenges as they try to plot that successful path from inception to growth and eventual exit from their business.
Whilst the most obvious of these hurdles may seem to revolve around points such as sales, staffing, suppliers, keeping abreast of changing legislation - and the inevitable chasing up of late payments – arguably the biggest single issue faced by many is the one of funding and access to capital.
Patently weak business propositions will more than likely fail as part of the Darwinian efficiency of a free market. But even for those who have a viable idea and take their business forward, funding expansion beyond those early rounds presents immeasurable challenges.
Banks are unlikely to be interested on what could be seen as competitive commercial terms; friends and family rounds are quickly exhausted and trying to tap into venture capital or angel funding networks is all too often an insurmountable task that involves time as much as luck.
Too many business founders simply don’t know where to turn or who to trust when trying to move to the next level.
Technology is enabling better access to capital and built-in efficiencies and it means that this capital access gap between scale-up to IPO in private equity can now be addressed.
InfinitX (formerly CrowdX) is a capital market for privately-held companies and has partnered with Vestd to not only allow companies with easy access to meaningful valuations but to allow these to be transparently seen and acted upon too.
Allowing for a transparent and efficient platform with all the necessary resources for capital access to exist under a single umbrella, means the route to equity funding, liquidity and IPO is much easier for founders.
Those who traditionally started out having to literally ‘Google’ for access information on wealth managers and intermediaries and hope for the best.
Efficiency is one of the underlying attributes this kind of technology enables. Take cap tables for instance.
We know that as companies grow through those first few years, nascent cap tables can become disorganised and shareholders often want to see change.
That can be for a whole host of reasons, but it makes perfect sense that those who played a part in the early stages may look to reduce their holdings as their exit multiples increase.
Equally, as a company reduces risk exposure as it grows, new investors frequently want to get onboard.
Whether that’s a case of rewarding staff to help with retention, growth and reaching long term goals, or taking the support of external parties who are committed to the cause.
Using technology to help companies grow in a sustainable manner can keep founders in control and in the best position to benefit from their hard work through the early years.
No one ever said that growing a successful business was easy, but at the same time, founders need to be empowered with the right tools to achieve the very best outcomes both for themselves and for other stakeholders.
It seems that for too long, achieving this has been too complicated, too expensive and just plain inaccessible.
With the InfinitX and Vestd partnership, we look forward to reshaping the way businesses of tomorrow can grow and succeed.
Written by Mike McCudden, CEO, InfinitX.