Interesting question I was asked, I thought; “smartest way?”
Smartest way is to appreciate that it depends.
- Service based business with no intention of exiting? Customers
- Making investment in infrastructure or property? Financing
- Funding technology development rather distinct and capable of establishing market share (willing to exit)? Venture funding
MOST of the mistakes I see entrepreneurs make is that they fail to appreciate that there is no rocket science in financing and funding. It works the same way it has always worked, and when founders say/ask about Venture Capital, for example, merely because they are a “startup,” you can tell they’re not being smart about it.
VCs don’t fund things that can’t deliver an outcome (ROI).
Banks don’t finance things that don’t have clear business models and revenues.
Debt goes to work when you have underlying assets that can be sold off if need be.
Does your business depend on your putting people to work on projects? Fund yourselves 🙂