Getting funded is the first step toward every startup entrepreneur’s dream. But while receiving an infusion of cash from a venture capitalist or angel investor is certainly a good thing, it doesn’t necessarily mean your company’s money problems are over. Even venture-funded startups can’t afford to divert scarce cash to everyday purchases, so one big tech vendor is trying to step into that credit void.

Startup businesses, particularly those that are growing fast, are in a constant state of acquisition. Hire someone? They’ll need equipment and a place to sit. It costs money to attract customers and clients, and even more to serve and retain them.

So even after a startup gets funded, founders may still need to make tough choices about where to invest scarce capital. To make those choices easier, last week, in what it calls a “first-of-its-kind” move, Dell introduced a $100 million initiative targeted toward newly funded small businesses.

The 10% Solution

A major part of the plan is a credit fund for small businesses. To qualify for the Dell Innovators Credit Fund, a business must have received funding from a pre-selected group of VCs or angel investors (Dell is adding new firms to the initial group) within the last 90 days. Qualified businesses can then access up to 10% of their funded amount (up to $150,000) in credit offered through Dell Financial Services, with what Dell calls “accelerated, limited credit terms.“ The fund is intended to help young businesses spend their investment capital on revenue-generating activities, not on technology purchases. 

The fund was the brain child of serial entrepreneur Ingrid Vanderveldt (left), Dell’s first entrepreneur-in-residence, who noticed that many “entrepreneurs, even when funded, still weren’t getting the credit they needed.”

Further impetus came from a Technology CEO Council (TCC) paper indicating “an outsized share” of new American jobs is generated by high-growth startups. In fact, the TCC reports, most years about 40% of new jobs come from the top-performing 1% of companies. Also cited in the TCC paper was a study from the McKinsey Global Institute, which shows “Web-knowledgeable [SMBs], across a range of industries outpace their less Internet-savvy counterparts in job creation by more than two to one.”

Steve Felice, Dell’s president and chief commercial officer, says the new fund gives new companies “access to technology to help fuel global growth and innovation while helping startups preserve precious equity capital for other business needs.”

Help Going Global

In fact, expanding internationally can be the key to growth for many small businesses. As Karen Mills, the administrator of the Small Business Administration points out, nearly 96% of the world’s consumers live outside the United States. Felice believes technology helps startups go global by “enabling them to get access to more markets, more countries and more supply chains.”

Of course globalization also means small businesses in foreign countries will now be competing with you for customers. But Felice says “small businesses need to realize that the world not only [provides] customers, but can offer partners as well.”

Felice is a big believer in the power of entrepreneurs: “If more of us don’t do something to help entrepreneurs get their ideas to market, economic instability will continue.” The goal of the Dell fund, Felice says, is to help entrepreneurs “fuel their great ideas.” If Dell's move encourages other lenders to offer credit to startups, it might actually make a difference. 

Disclosure: My company, GrowBiz Media, produces a newsletter for the Dell Women’s Entrepreneur Network, and I will be attending the DWEN meeting in India later this month.