Getting funds for a business isn’t easy — especially if your a startup or launching a new product as no shortage of entrepreneurs can attest. Learn these successful strategies on how to get your business funded.
Approach Family and Friends
You have the option of seeking the support of your family and friends for funds. But, your business might be too big to be funded by them or they might just not be interested in investing in your business. If you think you have a better chance of raising funds from your family and friends, go for it. Its far easier to get as they trust you more because of the relationship you have with each one.
Read More: Bootstrapping Vs. Equity Funding: Which Financing Will Help You Start a Business?
If you feel awkward making phone calls or visiting friends and family for funds, then be ready to do the following.
Try Crowdfunding
Crowdfunding is all about the idea of raising money from the general public. Usually crowdfunding offers the opportunity to get funded virtually from anyone, anywhere. The amount of funds might vary from a $1 to multiple times your requirement of funds.
There are crowdfunding websites that connect you as a founder or an entrepreneur to a wide range of investors. All you have to do is present your idea and ask for the amount of funds required with an outline of how you’re going to make use of the spends. Early adopters who wants to fund the “next big thing” to philanthropists who see the public good in a business idea or your friends and family can contribute through these crowdsourcing platforms like Kickstarter and Indiegogo.
Find a Mentor
The ideal mentors are ones who take an active role in growing your startup. They will mentor you and introduce you to their networks for growth of your business. That means in addition to mentoring you they also can help your business get funded through investor in their network.
Mentors can sometime become angel investors in your business. As they are working closely with you, if they feel satisfied and see the potential they will invest into your business or at least help you find an investor. As most mentors themselves have fund raised in the past, their experience will also help you a great deal in getting funded.
Join an Incubator or Accelerator
Startup incubators and accelerators are companies and organizations whose sole purpose is to develop and grow early-stage businesses. Most incubators and accelerators become your seed investors upon accepting your business idea. The investors involved usually take a more hands-on approach in business operations.
Incubator and accelerators often provide a physical office space, allowing you to network and exchange ideas with other new startups. The mentorship provided at incubators and accelerators helps strengthen your business model and gives you access to the funding to execute your business plan.
Avail Government Grants and Subsides
In today’s world governments are incentivizing and investing in startups to boost their economy. Some countries like Estonia have gone a step ahead and help the startups in as many ways as possible. The governments share resources and facilitate innovation, change rules & laws, and inspires companies to take advantage of the latest techniques so that great ideas come to life.
Issue Initial Public Offerings (IPO)
If you’re a small company who has a good balance sheet and have built a reputation. You can issue Initial Public Offerings called as IPO’s in the securities and stock markets. Raising funds through stock markets might have been for the big boys of the industry. But, now capital markets offer the same kind of services for small and medium scale businesses as well.
With the advent of cryptocurrency today companies are offering Initial Coin Offering (ICO) to bypass all these know strategies for faster ways to get funded.
Approach Commercial Lenders
Getting funds for your business does not have to mean you have to give up equity in your business. You always have the option of borrowing money as debt to grow your business or just improve your cash flow. Banks and commercial lenders can offer you funds for a nominal interest for you to borrow and repay.
At some times, any money seems better than no money. As a word of caution. Don’t accept money from someone whose vision doesn’t align with yours. Always practice legitimacy and look for lenders with good history and read the agreement documents carefully.
Now that you have learned these successful strategies to find the right financial backing for your business, Go. Get Funded!
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