Start-up money

There are several models of financing business by clients, that have been defined by John Mullins from London Business School. Selling a business, looking for a partner, looking for an investor… There are really a lot of ideas available, but financing models are solutions thanks to which you can earn money if  your ideas are really good. Although all of these models differ in many ways, they are designed to achieve one defined goal. So what models are we talking about?

• matching model

It is a solution addressed to companies that do not sell strictly products, but offer intermediation services. What is it about? Such companies connect buyers and sellers, or customers and service providers. Thanks to such a solution, intermediary companies do not need to have a stock of goods, so it reduces demand for a given capital. The investment company works very well in this solution. Such a matching model is offered for example by eBay, Allegro or other companies that make money by acting as intermediaries in other companies’ sale.

• deposit model

This solution appeared in 2006, when FlightRaja, the startup from India, introduced the reservation of airline tickets and various types of travel services for B2B. At that time travel agencies had problems with booking and issuing tickets. Startup asked for a deposit of $5,000 to be settled in future services. Thanks to this, travel agencies could book tickets and started to function well themselves.

• subscription model

In this model, we bet on a subscription, which can be purchased for a month, a quarter, six months or a year. An ideal example of this model is for example Spotify, Netflix or other startups operating in the technology industry, as well as in the new media.

• standardization and resale model

In this case, it is a solution in which a given company operates on a large scale, for the needs of a specific contractor. It does a specific work and then sells it further. A company for sale, which is already very successful on the market, is really a very good investment in its further and even greater development. A perfect example of such an action is Rakesh and Rashmi Verma, which operated for the needs of Coca-Cola, selling its maps with bottling plants’ locations.

• crowdfunding model

It is a social financing that allows to invest in a product before it is created. An example is Oculus VR.