So you are on your way to launching your first startup? How exciting it must be and on indeed feels on the top of the world at the thought of creating a company and make it successful. At the same time, one of the most frequent concerns among startup owners is finding money to fund their startup. After all, nobody has free money to hand out, and they need to be convinced before funding a new project or startup.
Still, do not let money stop you from following your dreams and if you know where to look, you are sure to get the money you need. There are easy and fast cash loans available in the market as well as many other creative options available for a startup. You need to start on the right foot as more than half of the new startups die off because of the lack of funds. There are plenty of ways to fund your startup and explore the financing and growth options, provided you look in the right direction.
Well, if you are looking for ways to fund your first startup, you are just on the right page. Read on to get aware of the most popular and successful ways to get funds for your project.
- Dig into your personal savings – As they say, self-help is the best help, so, look at what kind of funds you have stashed away for rainy days and take them out. This is perhaps the easiest and the fastest way to get money for your startup. Most entrepreneurs prefer to self-fund their startup and look for other funding opportunities only when needed. As it is your own money, you will tend to spend it frugally and wisely, and this is good for your startup. Also, no one understands your business as well as you do, and you would, of course, spend the money smartly and only when needed.
- Support from friends and family – Another great option is to get help from close friends and family. Of course, you need to be close and comfortable enough with them to ask for money. Everybody has a good network of friends, siblings and immediate network, who are well aware of the vision or the business. Still, one must have a well-structured agreement and transparent communications when asking for funds for their startups. Otherwise, any misunderstanding can spoil those years of friendship and relationships. Even if you are borrowing from your closest friends or parents, make sure that there is a well-structured agreement and legal documentation so that everyone involved knows what they are getting into. Borrowing funds from family and friends is another easy option, depending on the kind of relationships one has with them.
- Crowdfunding with infinite possibilities – Most startups rely on crowdfunding top promote their vision and get funds for the startup. The crowdfunding platforms extend ones reach and allow them to penetrate deeper and broader sources to get the funds. One can set a target for the funds with a deadline and promote their vision and startup online to get more people interested and pool in the money. Often it is seen that the money raised can exceed the goal and hence it is an encouraging way to fund the startup. However, one should be prepared as planning and preparing for crowdfunding is time-consuming and it can take months to raise the money one needs. What is positive about the tactic is that a much larger group of people gets involved in your startup and with relatively small amounts of cash each. Thus, the fund givers face a much smaller risk and give more enthusiastically.
- Angel Investors for your business – There are plenty of wealthy individuals out there looking for great projects to invest in. Thus, if you are able to convince them about the worth and value of your startup, they would be more than keen to invest and provide capital for the startup. As they would be making chunks of investment, they would like to keep an eye on the project and its management team and would be keen to know how and when they would get back their funds. When raising funds from angels, remember that they will own a piece of your business and you carry a fiduciary responsibility towards them. Finding the right investors for your startup is a significant business decision.
- A government loan for aspiring entrepreneurs – Most startup owners tend to ignore government loans or grants. The government is always keen to back up any project that is good for the economy and has certain loans and grants to support the individuals. One has a high chance of getting their project funded by the government if they are younger and their startup relates to science or technology. There are various individual loans available with the governments at various levels and all one needs to do is search the government offers at city, state and federal levels.
- Accelerators for free resources – Accelerators are organizations that are often associated with major universities, large companies, and essential community development organizations. They provide free resources such as office facilities and consulting to, and many of them even provide funds. Thus, accelerators are an excellent option for those looking for much-needed money to fuel their startup. You may face some demanding affairs and procedures, but the accelerators can indeed speed up a stage in the business growth. Moreover, they introduce one to other startups and mentors and enhance opportunities to network and expand growth. However, keep in mind that it can be very competitive to apply for accelerators and very few applications are accepted.
Look at a local bank – Last but not the least, visit your local banks to see how they can help you get the money you need for your startup. Get an appointment with a loan officer and explain to him your project, the business plan, and the financial needs. The loan officer would like to understand as to how you would run your business and make money to return the loans. Depending on your startup and the situation, you may or may not qualify for bank loans. There are a large number of banks and financial institutions which are always keen on funding a new startup with a good credit history and promising success.