The Funding Gap; Why Startups Struggle When Trying To Scale 

Starting a business may be easy, but scaling it is always the most difficult part. Statistically, an overwhelming majority of startups fail to scale-up successfully and there are a number of factors which contribute to this scale-up struggle. A common reason startups fail to scale is down to the funding gap – the amount of money needed to fund the ongoing operations or future development of a business that is not currently funded with cash, equity, or debt. These funding gaps are typically found during the initial stages of research, product development, and marketing of start-up companies. 

Although it would be ideal for startups to fund their development plans (for example, digital marketing) with their own money, the reality is that most small businesses simply do not have the spare capital themselves to invest in growth. As a result of this, startups normally need to turn to external sources, for example venture capitalists or business loans.

Venture capitalists will give you the required capital in exchange for a percentage of equity share of your company. Apart from money, they can also offer their guidance and expertise, and will help you at every stage by constantly evaluating the business and its progress. However, one of the main drawbacks of this type of funding is that founders gradually lose percentages of equity in their company, along with reduced control and decision-making power.

Business loans are another common funding option for entrepreneurs, and although they are a convenient way to get extra finance without losing full control of your business, their strict lending criteria can make it particularly difficult for startups and small businesses to qualify for a loan as they don’t have the financial or trading history to back up their application. Even if startups are accepted, they will usually face large interest rates to compensate for the added risk.

The Funding Gap; Why Start ups Struggle When Trying To Scale
The catch-22 of this situation is that startups need funds to scale their business, but it is difficult to obtain funding as they have yet to prove themselves on a large scale. 

How Velocity Juice Is Different

We are here to help you scale faster by offering flexible funding and expert marketing support. There are a number of factors which sets us apart from other funding solutions, including: 

Zero Equity Dilution 

At Velocity Juice, we understand giving away equity is one of the most expensive ways to raise finance, so unlike venture capitalists, we offer a no-equity dilution funding solution. This means you stay in control of your business, and you receive flexible finance to achieve your goals faster.

We Have A Network Of Experts

Working with us means being part of a community of founders and experts, many of whom have built and exited their own businesses. Whatever your business challenge, we can connect you with the right people to help. 

We Offer Marketing Support & Expertise

We understand the impact that marketing can have on your bottom line, which is why we can help accelerate your marketing efforts through our in-house experts and network

We can provide you with your own dedicated marketing specialist, who will help you maximise the efficiency of your digital marketing spend and maximise your revenues. We can also give you free marketing and branding strategy sessions and will help you track your performance data on a 24-hour basis via our online platform in future.

We’ll also give you access to our trusted network of partners who can provide support or consultancy in technology, digital marketing and advertising at discounted rates.

The Funding Gap; Why Startups Struggle When Trying To Scale

Quick Offer Response

Raising capital can take months of meetings and admin, so we make it easy for the right types of businesses to access funding. Simply apply online, submit all your documentation and receive an offer within 24 hours.

To apply, we will need to see at least 2 months’ worth of marketing and financial data. Typically you’ll be spending a minimum of £5K on digital advertising and receiving a minimum of £10K in monthly revenues (2x ROAS).

Learn more about how our flexible funding can help grow your business here. 

We are Velocity Juice: helping digital-first companies scale faster by offering flexible funding with no equity dilution. For more information about what we do, check out our insights page or get in touch to speak to a friendly member of our team. 

Written by Kate, for Velocity Juice.


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