How to fund your new startup venture
Looking for some startup funding? There are plenty of different ways to finance your latest project. Becoming familiar with different options and learning which avenues could be more beneficial to you and your needs could assist you in reaching a higher level of success much sooner. After all, when it comes to business, two things you don’t want to waste are time and money. Take a look at the various ways you could potentially pursue startup funding, as well as the pros and cons of each alternative.
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You’ve most likely heard the term “crowdfunding” before, as it’s becoming a more and more popular source to gain funds. In short, this idea deals with individuals donating money to a person or organization that he or she wants to support.
Pro: Anyone who is interested in contributing, despite how much he or she can actually give, will be permitted to do so; therefore, the opportunity to have more investors is present.
Con: Receiving crowdfunding capital is never guaranteed and often works best for projects dealing with the arts or culture.
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Who doesn’t need an angel watching over their shoulder from time to time? “Angels” are often times retired company executives who choose to directly invest in small firms. These “angels” are usually experts in their career fields and share their knowledge, contacts and financial gains with firms or organizations they choose to invest in. Specifically, angels tend to assist with the early stages of the investment.
Pro: Angels can be a good fit for startups, with investments usually happening quickly, ranging from $25,000 to $1.5 million in a lump sum.
Con: Angels usually keep low profiles and can be difficult to find. Furthermore, most angels expect a high rate of return.
Though many may choose to opt away from Canadian government grants and loans, it’s important to remember that this type of funding is still available—kind of. Yes, grants are often desired due to the fact that free money can be obtained or money that doesn’t have to be paid back. However, grants are usually hard to come by for the simple fact that a specific niche generally has to be prominent in order for the cash to be given out. Other government funding programs are loans that will eventually have to be paid back with interest.
Pro: If you’re able to successfully secure a grant, then you will be rewarded money you won’t have to pay back at a later time.
Con: If you do pursue government funding in the form of a loan, you will be required to not only pay back what you borrowed, but also be contracted to pay interest on said loan.
Cold, Hard Cash from Loved Ones
Depending on the financial status of your family and/or friends, you may be able to reach out to a loved one for some financial assistance with your latest business venture. The specific agreement or contract between the entrepreneur and the one giving the “love money” will usually be determined by the two parties involved.
Pro: It’s sometimes much easier to ask for and accept money from a loved one versus a complete stranger. As well, a family member or friend may be more inclined to offer help.
Con: There’s a reason the phrase “don’t mix business with pleasure” is so well known.
How disciplined are you at putting 20 percent of your paycheck into your savings account? Believe it or not, the most common source behind startup funding is personal savings. If you plan on funding 25 percent to 50 percent of your business yourself, then you can prove to potential investors that you’re not only dedicated to your business, but that you’re simultaneously taking on some risk.
Pro: What better way to prove yourself in the competitive world of business than by funding most of your project yourself? The experience could be quite gratifying, with you not having to pay back too many loans or high interest rates or seek outside assistance.
Con: When using your personal savings account for startup funding, you run the risk of losing everything.
The Best Option for YOU
When it comes to startup funding, remember to do your research. For example, you need to explore all of your available options and then only pursue the choices that will completely accommodate you and your needs. Because each and every avenue has its own risk and reward, it will be important to do your homework. After all, you want to be able to prove that you’re a worthy competitor in the game of business.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.