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Raising Funds For A Traditional F&B Or Retail Startup


Over the past two weeks I’ve received at least five emails asking for startup advice. Most of them merely had ideas but no clue how to start in their industry, three of them needed advice on fundraising, and just one asked recommendations for a mentor (no prizes for guessing which impressed me most).

But one of the greatest challenges faced by aspiring entrepreneurs is to raise sufficient funds to start their business. The three that needed to raise funds weren’t in the technology space but in traditional retail and F&B – which makes fundraising even more difficult.

Here are some ways such startups can raise funds:

Angel investors.

The hard truth is that while interest in traditional retail and F&B startups has risen over the last five years, most of them are unlikely to score any venture funding. And even if they do, traditional businesses are difficult to scale fast and big enough to meet the high expectations of venture capitalists.

Their best bet is finding an angel investor who’s passionate about their area of business and is willing to stump up some cash to help kick-start them along. But finding the right angel investor isn’t easy either, and requires a superior network of contacts.

Friends and family.

By far one of the more popular ways of raising funds for business (around 31-percent of small business owners do it), borrowing money from friends and family has its upsides and disadvantages.

Although terms can be more lax when borrowing money from someone you know, it’s also a double-edged sword – relationships can be adversely affected when things go sour.

Traditional financing.

And of course, there are more traditional ways of raising funds. Maxing out credit lines is one way, although high interest rates can cause a struggling young startup further down the road. Another way is capital finance through bank loans, which is usually an option if the startup entrepreneur has some experience in his belt.

The best entrepreneurs, of course, assess and leverage one or more of the financing options above. If you’re an aspiring retail or F&B entrepreneur, I wish you all success in getting the funding you need to launch and run your business.

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