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Should You Consider VCT Funds For Your Early Stage Business?

English: , founder of venture capital firm Dra...

English: , founder of venture capital firm Draper Fisher Jurvetson, widely recognized creator of "viral marketing" (Photo credit: Wikipedia)

Should You Consider VCT Funds For Your Tech Startup Funding?

Getting funding for your business during its early stages can be difficult. A bank loan might help in the short-term if you already have established profits and a history with the bank, but many individuals are forced to look elsewhere for help in expanding. If your early-stage business needs help, you might consider looking into Venture Capital Trusts (VCTs) for help in funding. Like any venture capitalist, such an organization will generally provide you with funding for a certain investment in your business.

It is important to remember that even the best, most humanitarian VCT is still looking to turn a profit by investing in your business - as such, the trust will usually be looking for an investment that benefits it more than it benefits you. You will absolutely end up giving away part of your business in exchange for the money that you need. Your main question, then, should be whether or not the offered funds are worth having to give up a portion of the business that you have worked so hard to create. For some, that kind of tech startup funding means making deals. For others, though, giving up any amount of control simply is not worth the risk.

Is working with a VCT worthwhile? It depends on the situation. If the VCT is looking for a relatively small stake in your business in return for a substantial amount of money, it might be worth giving up a bit of control. Your decision, though, should always be predicated not on what you get, but on what you would be giving away.

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