Question

how else could blue apron have raised funds to continue to grow? compare the risks of raising private funding to going

Answer 1

Blue Apron is an American ingredient and recipe meal kit service. It exclusively operates in United States. The weekly boxes contain ingredients and also include suggested recipes that must be cooked hand by the customer using pre ordered ingredients. Matt Salzberg, IIia Paps and Matt Wadiak are the founders of Blue Apron

In my study, they have raised funds in three method. That are,

1. Crowd funding : Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people. At the commencement stage of Blue Apron they raised fund by crowdfunding.

2. Angel investors : Angel investor is an individual who provide capital for a business start up, usually in exchange for ownership equity. Angel investors usually give support to start ups at the initial moments. Rapid growth in Blue Apron was witnessed after investing Angel investors.

3. IPO : Initial Public offering or stock market launch is a type of public offering in which shares of company are sold to institutional investors and retail investors. Blue Apron is listed in New York Stock Exchange (NYSE)

Any company even Blue Apron can't make rapid progress with private funding. In private funding business sells corporate bonds or shares to investors with out offering them for sale on the open market. It leads to following drawbacks.

1. Reduced market for the bonds or shares, which may have long term effect on the value of the business as a whole.

2. A limited number of potential investors, who may not want to invest substantial amounts individually.

3. The need to place bonds or shares a substantial discount to compensate investors for their greater risk and longer term returns.