How to Finance the Scale-Up of Your Company

Use multiple sources of finance. Many entrepreneurs who are propelled into a sudden growth trajectory think mostly about raising risk-sharing equity investment from venture capitals or private angels.

Cross-leverage money from one source into cash from others. It may seem counterintuitive, but owing money to banks often makes you more attractive to equity investors, not less.

Speak different dialects with different capital providers. When you do cross over to talk to the bankers or other financers, learn how to speak their language

Be opportunistic about raising money. Of course, both business school and real life experience teach us that it helps to plan out your moves in advance and it does

Manage accounts receivable like a hawk, but pay on time. This saved us hundreds of thousands of dollars in financing. Managing payables is just the flip side of the receivables coin

Cultivate customer financing. This can take different forms, including up-front payments, down payments, or covering some of your development expenses, usually of course for a discount on their purchases from you in the future.

The reading reaction memo after reading above should:

(a) compare and contrast key points that strike you from the reading(s);

(b) evaluate the arguments and evidence on the point(s) you cover, identifying what was insightful, mundane, unclear, incomplete, contradictory, etc.; and

(c) conclude with 3-4 questions for class discussion. The reaction memo should not merely summarize the reading(s) you consider, but it should also demonstrate an active engagement with the point(s) you select to focus on, including how it (they) relate to your own experience, previous readings and/or with the larger set of issues covered in this course.