DISCUSSION: Capital Allocation and Funding Strategies for Scalable Growth (part 1 of 2)
AARON ADAMSON & ALEX POLAMERO: The Financial Crossroads: Navigating the Path to Scalable Growth
In this discussion, Aaron Adamson and Alex Polamero, talk to Brady Mason of Brady CFO and discuss the path to scalable growth.
As businesses pursue growth, capital allocation and funding strategies are crucial. Think of your business as a high-performance vehicle needing to shift gears. Your choices—whether to bridge payment gaps or invest in growth assets—will impact your trajectory.
Funding Options: Internal, Equity, and Debt
You have three options: internal financing, equity, or debt. Internal financing usually limits growth to around 20% annually. For scalable growth, external funding is often necessary, though it carries higher risks.
Sales and Marketing: Growth Catalysts
Sales and marketing are key to growth, but funding these areas is essential. Waiting for investor funds can delay progress. Investing in CRM systems and marketing services is crucial for meeting growth targets.
Debt vs. Equity
Debt is ideal for tangible assets, while equity is better for sales and marketing, as these are hard to collateralize. Equity offers capital without the debt burden.
The Bottom Line
Your choices in capital and funding will shape your growth trajectory. Make informed decisions and consider external funding to support growth initiatives.
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