Invested capital often has added, unseen charges associated with it.
Even your own capital comes with hidden costs. Ed Powers, Managing Director of the Capital Access Funds team at Bank of America Merrill Lynch, shows exactly how these additional charges accumulate in a recent post for Inc.
The cost of capital can differ widely, says Powers. It’s up to the business owner to assess the need for each respective form of capital. The categories include: personal capital, debt capital, and private party capital. Each one of these has accompanying fees that entrepreneurs must be knowledgeable about. For more on the hidden costs of capital, read the full article by Powers.
Related content from OpenView:
In this article, OpenView provides an even stronger case against fundraising without considering the costs first. Browse this checklist to find out what you should do if you think you’re ready for VC funding.