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Financing and legitimacy concerns for international new ventures

When attempting to start an international venture, the focus should be on finding a way into the market and cementing business relationships. Both of these tie back to legitimacy and financing which are necessary to create venture sustainability.

Seeking financing

Substantial financial capital is required when conducting business on an international scale to sustain the momentum until the operation becomes self sustaining. Savvy entrepreneurs will network in emerging financial economies in order to source funding and profitable markets.

The influx of nontraditional sources of funding, such as accelerators, incubators and crowd funding platforms, has changed the standard funding cycle. Previously, the financing cycle started with capital from friends or family, followed by business angels and venture capital. Although a new venture may not be interested in global operation from infancy, there are situations where oversees funds and resources are easier to obtain and international operation is a necessary avenue to success.

Establishing legitimacy

New international ventures struggle in markets when they have no industry tenure to fall back upon. For startups that cannot build upon a well known name or history, creating legitimacy is a challenge. Most often, startups face issues of newness, size or foreignness, which need to be overcome in order for the venture to be viewed as legitimate.

Newness and foreignness are conquered mostly by time in the new market as consumer trust is earned. However, the small size of an operation does not need to be viewed as a negative and entrepreneurs should work to tout the benefits of a boutique style operation. Smaller operations are able to tailor products to meet niche market needs.

International new ventures act as generators for future economic growth. Operating on an international scale may seem intimidating, but it is entirely possible with the right mix of ambition, business acumen and legal support.

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