How to Fund a Startup

How to Fund a Startup
  • Opening Intro -

    Do you have an awesome business idea but get discouraged when you consider the amount of money which you'll need to get things off the ground?

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This is a problem which many entrepreneurs have but it is important to remember that there is always a way to find the funds which you need for your business, it is all about keeping your options open. If you are in the position whereby you need funds, here are some ways of securing them.

Tight Plan

The first thing to mention before we look at sources of the money is to ensure that you have a watertight financial plan for your business. You need to work out exactly how much you need, what you plan to use those funds for – ensure this information is highly detailed. You also need to think about a repayment structure and how you plan to pay back, if required, the money which you have borrowed or taken as investment, this may be a direct payment plan or shares in the company, either way you need to know your stuff financially.

Loans

The first place to start for the best rates is the bank, check out both business loan options and personal loans as personal loans are eligible for business use. A bank will take a deep look at your business plan, they will also help you to put one together if you are struggling with this. A bank can offer strong investment with reasonable terms and they will often give you your own business manager to help you get started, after all they want the money back as much as you need it to get started, so helping you is in their best interests.

Angel Investment

An angel investor is someone who specializes in lending money to startups and they could be the perfect solution to your money woes. The keys to finding someone like this is to attend business events and network like there is no tomorrow, put the word out that you are looking for investment and do so within the industry where your business will be operational. You will likely have to give up some of the stake which you have in your business, and if you do get a shot with an investor, you need to be knowledgable and convincing enough that they want to part with their cash.

other valuable tips:

Bootstrapping

There are ways in which you can do what is called bootstrapping, which is essentially to do things on your own. You could use loans from family or friends, you can use several credit cards and call in as many favors as possible, you could even keep your day job if possible to keep some money coming in. This is a difficult option but if you have the will to work hard then it can work.

Crowdfunding

Crowdfunding is basically asking people across social media to contribute towards your business idea and whilst it can be a stab in the dark, it has helped many businesses to get off the ground. If you plan to do this then you need to run it like a marketing campaign and make it creative enough to get people behind your idea, and willing to part with their money to do so.

There are always ways to secure funding, you just need to work hard and refuse to take no for an answer.

Image Credit: Pixabay

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Consumer Tips reference:

GUIDE: turning your home into a bank

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Categories: Business Financing

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