Public vs Private Development Funding: Pros and Cons

Public or Private Development Funding: What’s Right for Me

Deciding on funding options can be a difficult task. There are many factors you need to take into consideration. If you try to start gathering your development funding without a strategy in place, you’re likely to run into obstacles. Make your path to development funding as clear as possible by using a strong advisement firm. Sports Facilities Advisory can advise you on the best funding options and help you get your business going.

Public Development Funding

There are two prominent options for funding your business. Public funding and private funding. Each comes with its own advantages and disadvantages. Public funding is one way to go, and it might be the correct option for your business needs. Public funding is available for your sports complex when you’re deciding to go the nonprofit route.

Pros

There are various benefits of public funding. The first benefit is you’re able to easily find the source of your funding, the bank. You’ll receive grants in order to run a nonprofit. You also won’t have to answer to anyone else, because there aren’t other investors in the mix.

Cons

Public funding isn’t without its disadvantages. Public funding is much stiffer and more regulated with how you run your business. Since you’re dealing with the bank, there’s a good bit of red tape you’ll have to get through. You’ll need to prove to them that your financial strategy is sound and that your business plan is legitimate. The bank also doesn’t take any of the emotional aspects of the business into consideration, so passion doesn’t help you achieve funding.

Private Development Funding

The other route you can take is private development funding. This could involve a small group of investors, an angel investor, or venture capitalists. There are a number of ways to achieve funding with this method.

Pros

With private investing, you have more flexibility in how you do business. There aren’t any rules or regulations you need to adhere to, other than the ones you agree upon. The passion aspect also comes into play here. Chances are a private investor wants to invest in you because they believe in your vision or they share your passion for the industry. This makes for strong business relations in most cases.

Cons

We say in most cases because the main con to private funding is usually circumstantial. If your investors end up being difficult to work with or counter to your visions, issues may arise. That’s why it’s as important for you to consider whose money you accept as it is for them to decide who to give their money to. It’s not always the best idea to take the first offer that comes your way. Consider all your options and make sure to avoid being hasty.

Development Funding Advice from SFA

Development funding is sometimes complicated. Let Sports Facilities Advisory ease the stress that comes with the development funding process by guiding you through the hurdles. We can help you come up with a development funding strategy that will best suit the goals and vision of your business. Contact Sports Facilities Advisory today for more information. We look forward to working with you.