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Why Investors Want to Work with Tech Businesses

Getting funding for your new idea doesn't have to be hard!

If you’re starting a tech business, whether it’s a computer repair shop or a Silicon Valley startup, you’ll need one thing above all else: funding.

Luckily, banks and investors are keen to fund businesses that are tech-oriented. Tech companies have several things going for them that make them automatically appealing. We look at a few of these traits.

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Tech is scalable

If you have an idea for a brand-new online platform or software, and you can prove that there is a market for that idea, investors want to hear from you. While the initial setup may require quite a bit of capital, replicating the product is relatively cheap. Once your product or platform has been released, most of your resources will go towards customer service and tech improvement. That means your company has the potential to scale exponentially.

Production-based startup companies may have better luck with grants from organizations like the Small Business Administration or loans from a small-business-friendly bank. This is also true for repair shops, web design companies, gaming stores, etc. While tech is a reliable money maker at just about any level, big-time investors aren’t likely to see a return on their preferred timeline with smaller ventures.

Still, a small, local business can make quite a comfortable living for a few local families.

Tech founders have skills to fall back on

Most tech founders have a degree or, at the very least, practical experience in their field. Investors are more likely to listen to a business plan from someone who has experience in the space their company is trying to enter. Banks are more likely to lend to someone who has a technical degree or occupation because they tend to be high earners with steady incomes.

Although no small business owner wants to think about falling back on plan B, the fact that they can means banks will feel more confident in the loan repayment.

Tech is practical

With many tech companies, it’s easy to see how they would operate in and improve everyday life. Technology is necessary for every field: agriculture, communication, web design, food delivery, transportation, medical testing, finance, education, and—of course–entertainment.

The Covid-19 pandemic has ensured that technology has proven its worth, and both bankers and investors can see that.

Conclusion

If you choose to start a tech business, you’re already one step ahead of other industries regarding funding. Banks and investors love tech companies for their scalability, reliability, and practicality.

Financial Resources

If you plan to explore loans for your tech business, the following companies may be able to help you on your funding journey.

  1. Upstart – This fintech company offers personal and small business loans.
  2. B9 – This app offers early paycheck advances with no credit check or interest.
  3. Credit Karma – This recognizable company has an app that performs credit checks, calculates Approval Odds for various loans, and they even provide their own loan resources.
  4. SkyBlue – This program offers credit checks, identifies dispute candidates, and provides tips to help improve your score.
  5. Truebill – This personal finance app keeps track of monthly bills, detects fraud, and even negotiates lower payments.

Check out more business financing guides from NerdSimple today!

Heather S.
Heather S.
Heather is a professional blogger and content writer. She enjoys researching interesting topics (like the latest in games and tech) and transforming the information into attractive content.
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