There are many methods you can use to get funding for your business idea or startup. Some ways are more feasible than others, but the most important thing is that they all work! But just because they all work doesn’t mean they will work for everyone or every idea.
Sometimes it’s about timing, and when you want to go for funding. There are many reasons why some people do not get funding for their ideas and startups. When you need to get funding for your idea or startup or change the way you do things, start by researching and seeking advice from experts in your field. This is what all the experts say – finding a mentor can make all the difference to getting funding.
As with many things, success will be determined by how much effort you put in. There are many ways you can approach getting funds and funding, as per your situation and industry. By doing your research, you will stand out from the crowd and gain momentum for funding and support for your business idea or startup.
Ways to get funding for your business idea or startup?
Some ways are more feasible than others, but the most important thing is that all of them work! But just because they all work doesn’t mean they will work for everyone or every idea. Sometimes it’s about timing, and when you want to go for funding.
1. Angel investors:
These wealthy individuals make their money the old-fashioned way, they work hard and they invest hard. They invest in new product or service ideas. These are usually billionaires or multi-millionaires from different fields of business that have money to invest in new products and company ideas. Be prepared to be rejected by these types of investors, no matter how good your idea is.
Angels require you to have a good idea and a strong business plan, but they don’t always invest in very young companies. The best time to approach an angel investor is when you have a good idea and are ready to start the company.
2. Venture Capitalists (VC):
Venture capitalists are like angels but they have their fingers in more pies than just the upper end of the market. VCs expect a quick return on their investments, they are very time-specific. They tend to invest in young companies that have little or no revenue and the returns tend to be much greater.
Again you need a good idea, a solid business plan, and be ready to start your company when you approach them. You will also need to have some revenue projections or ideas on how you intend to generate revenue within a short period of time after investment ( 30 to 90 days).
3. Private Funds:
Private funds are where you need to start. Private funds will pay for the running of your business for at least the initial first year, usually more. These types of private funds are run by individuals who have a strong personal interest in your idea and business, they may be friends or family members from whom you buy into the business. They will take part in the running of your company and provide financial input on a monthly/weekly basis with other shareholders on how your company runs.
Crowd-funding is a way of raising start-up money from a large number of people through the internet, usually through a website. It’s about finding customers before you find capital and is done by creating a profile on a crowd-funding site, finding the right platform for your idea or company, and then creating marketing messages and starting to approach funding from customers to raise the necessary capital.
This is quick and easy and there is no long string of applicants. This is also a way to raise capital through the internet and has become very popular as an alternative to traditional funding methods that are too onerous for start-ups or small businesses.
5. Business loan:
This is only if you have a business and you want to expand your business. You need to show the bank that you are good for it and that your company is profitable, then they will lend you the money.
Business loans are like a personal loan – you get funds from a lending institution and the funds will be used to buy equipment, set up your company, or help you achieve your goals regarding the day-to-day running of your business. Loans are a good option for those who have been turned down for funding from other sources.
6. Friends and family:
Not many people take this route, but if they do it’s usually a great success. It’s basically like having your own private investment fund, with no strings attached, as long as you don’t overstep your limits with them! If you have a stable business plan, this is a great way to go about things.
Your family and friends are always glad to support you in any way they can, so you should take advantage of this and put your ideas forward to them, that way they will be able to support you with money and time during the initial start-up phase of obtaining funding. If your family or friends are small investors in your idea or business then have them take part in the running of it as early backers.
7. Government Grants:
Many government grants are available to individuals and businesses in need of funding. Find out if any government funding is available for your business idea or startup by going online to your state’s regional Chamber of Commerce website or go directly to the state level and federal level websites where you will find a wide array of grants available for small business startups.
Always do your research to find out what grants are available for your type of business, industry, and region. If one approach doesn’t work then try another.
All these funding routes have one key thing in common – they all work, but only for those prepared to put the time and effort in. All forms of funding can be viewed as a form of investment or loan, so you should be prepared to give up some control over your company when you approach these people for funding.
All forms of funding require a personal sacrifice on your part, so you should always be prepared to do this – whether it is investment capital or working hard with an angel or venture capitalist. If you are not prepared to give up some control then don’t even start looking at these options.