- by Net Pro Referral
- 21 Jul 2018
Finding Funding for a Startup Business
When we are young and fresh out of colleges, almost all of us secretly harbour the dream of starting and owning something of our own. But with time, burdened with various social and familial circumstances and lack of resources, we end up becoming bound to a desk job in someone else’s company. One of the main hurdle on the way to fulfilling that dream is not having resources to break free of the chain and venture into something new. And exactly that is why you probably reading this post right now. You are searching for the best ways to fund a startup business to start your own business, and that’s just great!
Here, in an attempt to turn that dream of every entrepreneurial soul out there into a reality, we will enumerate all the best ways to start-up funding. So, read on to know more on how to get funding for a startup business. We will start from the best way!
The most secure, flexible and easy way to funding your startup is to invest your own money into it. No matter how much money you have, it can be your savings or anything else that you can amass, start from it. Although self-funding can mean slow growth, it gives you total freedom over your startup operations and does not involve giving control in the forms of equity, profits, etc. Your business remains totally yours. But if your personal wealth falls short of the idea you have, you can always start with something more humble and rise up to your initial idea of the startup.
Ask Friends and Family:
Although it might not sound a good idea to many, asking your friends and family for funding can give you a start before you venture for funding from outside. Even if they are not able to fund much into your startup, they can very well provide you with any additional help you might need. However, before asking for money you must have your business plan ready the way they will best understand so that you can easily convey to them what you are planning to do, how you are going to do it and how your profits are going to roll.
Search for Grants:
The government offers grants to promising entrepreneurs and small businesses who are working on new technologies or for any important cause. This can be a great source of funding if you are eligible as it will not cost you any equity, shares or control over your startup. You can check out grants.gov. It is a searchable directory of all the grants currently the government is offering for your great cause. You can also search for grants from non-government organizations too. There are many private companies and organizations that frequently fund for the cause they like.
Online crowdfunding is comparatively new but very popular way to raise funds for your startup. Through portals like Kickstarter and IndieGoGo or Gofundme, you can create a project to showcase your idea of the startup to potential backers and donors. Crowdfunding is a great option for startups as it has the potential to gather a considerable amount of money for your business. Besides, it will not cost you any equity nor you will have to return the money as it is not a loan. You will just have to offer some rewards to your backers.<>/p
Consider Taking Loans:
Taking a traditional bank loan is always an option when you are sure that you have a great idea and you will work hard to steer it to success. Depending on the amount you need, you can consider either a small loan from micro-loan organizations like Kiva and Accion. However, the mainstream banks like Bank of America and Wells Fargo have recently started helping small businesses. So, you can also start knocking them for your loan.
Look for Angel Investors:
Angel investors are wealthy businessmen who invest in promising startups in exchange of equity or profit share. If you are looking for an even greater amount of money than what loans or crowdfunding can offer to you then angel investors can be a great source. Use local networking with other entrepreneurs, check out with your local chambers of commerce, visit sites like Gust, Angel Capital Association and AngelList to find and connect with potential angels.
Venture Capital Investors:
You probably heard of venture capitalists who are always on the lookout for rising or promising startups to invest in. This can be your bet if you are already doing well and want to expand even more. Venture capitalists usually are ready to invest a huge amount of money but expect 3 to more times greater return on investment in 5 to more years. To get connected with venture capitalists you have to leverage your contacts. Try LinkedIn and National Venture Capital Association website to connect and pitch your business.
Consider Startup Incubators:
The idea of a startup incubator is a new one but very effective nonetheless. There are many startup incubators out there associated with reputed universities or community development organizations that offer free resources, office spaces and seed funding for promising startups. You can consider joining one of them if your needs match up.
So, no more struggling with funds when it comes to your dream startup. Start sourcing funds right away!