As consumer tech continues to revolutionize the way we live, work and play, companies in this space are constantly searching for innovative ways to fuel growth and stay ahead of the curve. With fierce competition and constantly evolving market trends, financing is more important than ever to fund R&D, expansion and marketing initiatives.
Here are the top 5 new-age finance strategies that consumer tech companies can use to fuel growth and stay ahead of the curve:
Revenue-based financing: This alternative financing option allows companies to secure funding in exchange for a percentage of future revenue. It’s ideal for consumer tech companies with a solid revenue stream but limited collateral or assets. This option is especially attractive for companies that want to avoid the risk of dilution or giving up equity.
Crowdfunding: Crowdfunding is a popular financing strategy for consumer tech startups. It allows companies to raise funds from a large pool of individuals who are passionate about their product or mission. Crowdfunding platforms such as Kickstarter and Indiegogo have helped launch successful consumer tech products, from smartwatches to smart home devices.
Asset-based loans: For companies with valuable assets such as inventory, equipment, or intellectual property, asset-based loans are a viable option. These loans are secured by collateral, making them less risky for lenders. Consumer tech companies can use asset-based loans to finance inventory, buy new equipment, or fund R&D initiatives.
Venture debt: Venture debt is a popular financing option for startups that have already raised equity financing. This type of debt allows companies to leverage their existing equity funding to secure additional capital. Consumer tech companies can use venture debt to finance expansion or acquisition initiatives without giving up additional equity.
Revenue sharing: Revenue sharing is an innovative financing option that allows companies to share a percentage of future revenue with investors in exchange for capital. This option is ideal for companies with strong revenue potential but limited assets or collateral. Revenue sharing is also attractive because it aligns the interests of investors and companies, as both parties benefit from the success of the business.
Consumer tech companies looking to fuel growth need to explore new-age finance strategies to stay ahead of the curve. By leveraging innovative financing options such as revenue-based financing, crowdfunding, asset-based loans, venture debt, and revenue sharing, companies can achieve success and boost revenue.