News & Insights

The Crucial Role of Networks in Accessing Entrepreneurial Capital

Access to capital is often the make-or-break factor that determines whether a promising idea takes flight or remains grounded. While talent, dedication, and a solid business plan are essential, securing funding is a critical hurdle that many aspiring founders struggle to overcome. However, research has shown that the strength of an entrepreneur's personal and professional networks can significantly impact their ability to access capital.

Trends Transforming Entrepreneurial Funding Landscape

According to a report by the Cambridge Centre for Alternative Finance, the global alternative finance market grew by 92% in 2021, reaching $1.19 trillion in transaction volume. This growth is being driven by the increasing popularity of platforms like Lending Club, Funding Circle, and Kabbage, which have collectively facilitated over $50 billion in loans to small businesses and individuals since their inception. In the United States alone, online alternative lending to small businesses reached $25.7 billion in 2021, up from $19.6 billion in 2020, according to data from Transunion.

Entrepreneurship rates have been trending upwards in the United States for the past 19 years.

The top three challenges in entrepreneurs:

1) Recruiting

2) Inflation

3) Insufficient Capital or Cash Flow.