Four ways to fund a start-up
Matthew Cohen outlines the advantages and disadvantages of different funding options for companies seeking to transform innovative materials into material rewards
There is no one right or wrong way to grow a company. Every start-up’s journey will have unique twists and turns, and although venture capital (VC) gets a lot of attention as a means of helping entrepreneurs obtain outside funds, it is hardly the only game in town. In fact, in most situations, VCs are not the optimal funding source for early-stage companies commercializing novel physical science innovations – and I say that even though I am a VC investor at a firm that supports companies doing just that. The numbers back me up: according to the crowdfunding platform Fundable, fewer than 1 in 100 start-ups are funded by angel investors and about 1 in 2000 (0.05%) are funded by VCs.