Replenish your revenue stream with alternate forms of financing.

For entrepreneurs with a certain temperament, camaraderie and caffeine may be the only fuel needed to keep a startup humming. Those aspiring to introduce their products and services to new markets realize funds must supplement the bottomless java and office-wide video game tournaments in order to help a startup company develop into a mature one.

In previous posts, we have addressed the benefits of establishing a public presence through filing an IPO or participating in a reverse merger. Undertaking both of these options requires a significant commitment of time and money. For companies that have neither in surplus, there are alternatives available to augment funds when other sources have dried up.

These three options can provide the financial support necessary to sponsor market expansion, helping startups turn their revenue stream into a flood:

1. Private placement

Those seeking funding through this option reach out to financial institutions. These organizations notify favored individuals that an investment opportunity exists. As only a few investors are involved with this transaction, the securities sold do not have to be recorded in the same manner as do the transactions conducted by a publicly traded company. While the bookkeeping guidelines of this "unregistered offering" are not as detailed as those of an IPO, companies participating in type of investing have to file paperwork that satisfies the requirements of Regulation D with the SEC. Rules within this regulation set limits as to the amount of money that can be raised in a given time period.

2. Joint venture

Startups that support the notion that there is strength in numbers seek out other companies to forge alliances and pool resources. In participating in this enterprise, companies can extend their market reach, streamline manufacturing and simplify distribution of goods. Those who form partnerships may have to relinquish some control over their company's strategic plan and goals as a result of teaming up with another organization.

3. Refinancing

For entrepreneurs who bridle at the thought of diluting their stake in their company, refinancing is a method for retaining control and receiving financial aid. Companies that seek to revise a loan for their debt will need to provide documentation revealing their superior credit and their ability to repay the loan. Certain refinancing plans need to be filed with the SEC.

While these funding options do not require the planning and commitments of an IPO, they may be used as a stepping stone for becoming a publicly traded company. It is possible that your company may not be ready for the commitment necessary for filing an IPO; however, the future may provide opportunities for such an investment.

Those seeking advice on startup funding options are recommended to seek counsel of a knowledgeable attorney.

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