Once you have a world or a network-of-networks (Network) where your Business is thriving and you need capital to grow, you engage some type of aCapFac on your behalf. There are a few key ways to facilitate capital:
We will go from the simplest to not as simple:
Asking your closest network to invest in you.
Pitching to professional and semi-professional angel investors.
Raising first money from institutional capita, such as venture funds focused on the earliest stages of new companies that start raising professional money.
Raising from this new "seed" class of funds when you have achieved a reasonable product-market fit as evidenced by various traction metrics.
Scaling the business through larger rounds of financing to drive marketing and sales to grow cash flows with a focus on the top line.
Exiting the business or preparing the business for a larger exit by growing cash flows with a focus on the bottom line.
And again from the simplest onwards:
Raising under a variety of SEC exceptions via publicly crowdfunding from accredited and potentially non-accredited investors. The focus is on large numbers of investors who may write smaller checks.
The new Web3 economy has opened up a new channel of engaging investors via cryptycurrencies and NFTs.
The traditional Wall Street stype IPO, raising money via big exchange listings such as the NASDAQ or the NYSE.
The not so new acquisition vehicles that first list on the exchanges and then find suitable private companies to merge with or acquire.
Ultimately, people invest in people, regardless of the route and vehicles involved.
Investors often uses a combination of their own money and other people's money to invest in deals. In this case, and thus in most cases, they're really syndicating investments aka managing money on behalf of the people who have it. They invest.
And these syndicate leads can be at all levels, including the earliest of stages. Indeed, AngelList is a great example of a syndication platform. The notion of syndication turns anyone who can lead a syndicate into a "venture capitalist".
The best such "VCs" are angels and scouts for early stage funds, who often initially invest as angels themselves, and then also help syndicate larger rounds.
Businesses should become involved in helping their ecosystem partners grow, not just with cash flow through revenue based partnerships (the best!) but also through syndication and through direct investments.