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Why Is It so Hard to Get Small Business Funding?

When there’s a crisis, people get innovative and adapt to new circumstances. In 2020, when millions were being furloughed or laid off, many people used that opportunity to start their own business. According to TOP Data, 4.42 million business applications were made between April 2020 and February 2021! But it isn’t just because of the pandemic. Year-over-year, new business creation increases by almost 40% across the U.S. Talk about the land of opportunity! It seems like launching a start-up is a cinch. But getting small business funding isn’t as easy as some make it seem.

Everybody wants to invest in the next Netflix or Uber.

If you’re just starting, it can seem like everyone except you is getting the funding they need. Everybody wants to be the next Netflix or Uber, but the truth is that for every thriving, successful business endeavor you see, there are 10 still trying to find one investor. Venture innovator Mark McNally from Nobody Studios says it’s difficult to find small business funding because Wall Street is pumping money into specific start-ups. The big guys are looking to invest millions, if not billions, into early-stage start-ups that are on track to be worth at least $1 billion. There doesn’t seem to be room for the little guys anymore.

A solution for smaller start-ups

But like I said before, people tend to get innovative in a crisis. As we speak, start-ups are finding ways to bypass traditional VCs (venture capitalists), Wall Street and all of the old guard. Crowdfunding, angel investing and direct investors are becoming the new normal. “The Elon Musks of tomorrow don’t have to come to Silicon Valley to get the same access to capital,” McNally told Bold TV. “Capital has become more democratized. You can raise online.” With Nobody Studios, McNally is turning the venture capital model on its head; his company is able to invest not just money but time and effort into start-ups and help bring them to market. 

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