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Education

Alternative funding as a means to reach new verticals

By Chad Otar space. Some entrepreneurs have built new verticals
Lending Valley by releasing their own crypto tokens; others have
experimented with bitcoin and more established crypto
uilding a business today is both a whole lot lending platforms.
easier and much more challenging than ever.
Numerous opportunities available to those Ultimately, the crypto space (and decentralized finance in
B who want to build a global business on a general) is projected to grow. Savvy entrepreneurs would
shoestring never existed before the internet came along. do well to explore crypto opportunities as they become
However, this has produced an almost unbelievable more mainstream.
amount of competition—pushing small business owners Building better verticals with alternative funding
and entrepreneurs to be more creative and strategic to
generate real success. Before securing funding to open up new verticals, it’s
important to be sure this is the smartest move for your
This is a big part of why so many businesses are focused business. Here are a few things to consider before jumping
on vertical integration. Vertical integration can help into new markets:
businesses not only better control their costs and supply
chain, but also deliver a host of new products and services • Understand the new market top to bottom. You
must know who your perfect prospect is, who your
they might not have been able to offer otherwise. Securing
the financing to go vertical, though, can be a challenge. ideal customer is, what they really want and how to
deliver it.
Alternative financing can help. This article offers several
alternative funding solutions for small businesses. • Verify that opening up this new vertical will create
new business building opportunities. Sometimes
Crowdfunding new verticals look far more attractive than they are
simply because they are new and shiny. Confirm
Crowdfunding is a game-changing solution for small that’s not the case before moving forward.
businesses. It enables businesses to go directly to their
market, pitch their ideas for vertical integration, and • Stay flexible. Prototype your entrance into a new
ask for help to fund their approach—and their growth. vertical first. Track results, pivot whenever neces-
Businesses that successfully crowdfund can grow their sary, and look for new ways to iterate and optimize,
businesses with the kind of security most entrepreneurs securing the right amount of finance to move for-
in the past never would have imagined. The rub is that ward without acquiring unmanageable debt.
the pitch has to resonate with the market. Businesses that
go the crowdfunding route must be able to pitch a new Securing alternative funding as a means to reach new
vertical and get enough of their market to buy in (literally) verticals is similar to securing traditional funding—with
to get their new operation off the ground. a couple of wrinkles thrown in. Enter with a solid idea of
how you’re going to turn debt into profit.
Fintech
Determine how new verticals will help you competitively,
The financial technology (fintech) space is growing help you win new customers and integrate into your core
exponentially. Entrepreneurs have fallen in love with
fintech operations not only due to the lower barrier of operation later on. Only then will you be ready to rock ‘n’
roll using alternative funding to help make it happen.
entry to secure funding for launching new verticals, but
also because many fintech services mimic traditional Note: The following resources were used in researching
financing routes but without the red tape and overhead.
this article:
P2P lending • https://articles.bplans.com/top-alternative-funding-
Peer-to-peer (P2P) lending, sometimes called social options/
lending, allows individuals and groups of individuals to • https://ramp.com/blog/alternative-funding-options-for-
invest their own money directly into businesses opening businesses-and-startups
up new verticals in a way that was impossible previously. • www.investopedia.com/terms/v/verticalmarket.asp
Likened to a hybrid of crowdfunding, traditional loans
and angel investing, hundreds of millions of dollars are in • https://fitsmallbusiness.com/alternative-funding-for-
this space for entrepreneurs to access. startups/
Crypto lending
Chad Otar is CEO of Lending Valley Inc. For information about the com-
Even though the crypto bubble has popped a bit, crypto pany, please visit www.lendingvalley.com. To reach Chad, send an email
remains very much a big part of the alternative finance to chad@lendingvalley.com.

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