Startups had a stormy year in 2023, with adverse economic conditions resulting in unprecedented challenges in obtaining capital and even remaining in business. Venture capital funding dried up, resulting in over 3,000 startups folding last year, with many more laying off employees, especially in the technology sector. 

In 2024, much of that difficulty has persisted, with startups facing headwinds such as a harsh funding environment and inflexible cost structures, as funding levels fall back to pre-pandemic levels. This has resulted in a huge dearth of funding, making it harder for entrepreneurs to start or grow their businesses.

Given the challenges the startup world is facing today, Peter J. Burns III, a serial entrepreneur who has started more than 150 businesses across his five-decade entrepreneurial career, says it's more important than ever for business owners to obtain capital with repayments that won't cripple them. 

Burns developed the Burns Funding Method, which uses unique financing and investing techniques to give business owners access to private unsecured debt capital – something many new entrepreneurs have difficulty obtaining. Via this method, Burns helps qualified borrowers take out loans from its extensive lender database, receiving up to 10 times more than if they searched for loans on their own. After charging a fee from the principal, the remaining amount is split in two, with half available to be used for the borrower's business, while the other half is invested in ventures personally curated by Burns. These investments generate enough income to pay for the entire loan, and, once the loan has been repaid, Burns will share the profits with the borrower for a three-year period.

By developing the Burns Funding Method, Burns is able to solve one of the major reasons startups fail or are unable to scale. Another major reason, he says, is the lack of mentorship. He helps address this by providing valuable business knowledge to the borrowers he works with. 

"I encourage nascent entrepreneurs to seek out someone who is an accomplished entrepreneur, someone who’s already been there, done that, and learn from them," Burns says. "I also tell people to be smart and not to quit their 9-5 day jobs before their business is making enough to replace the income that will be lost. I think it’s really important to be able to live off what you make, while you’re investing resources into your new venture. But, many people get caught up in their dream and they’re in a rush, so they end up failing."

However, Burns says that failure is not the end. Instead, he believes that each failure should be taken as a learning opportunity for what not to do in their next business venture. On the other hand, there are some people who are too scared to risk anything, which can be just as bad, as their ideas will never become reality.

"Some people spend their entire lives fearing change and clinging to some semblance of security," Burns says. "But, what they don't realize is that security is just a myth. The company that you work for could go bankrupt or be acquired and you'll find yourself out on the street with no job, despite doing nothing wrong. Everything is transitory. There’s no security in anything except in yourself and your own abilities. So, if you have a good idea, don’t be afraid to act on it. You’re not expected to know everything, and that’s what an entrepreneurial team is for. Investing in a business includes hiring individuals who can assist you on your entrepreneurial path, even if it’s part-time at first. Once you have a good plan in place, go on and take that leap – you have nothing to lose at all."

This post was authored by an external contributor and does not represent Benzinga’s opinions and has not been edited for content. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice. Benzinga does not make any recommendation to buy or sell any security or any representation about the financial condition of any company.