Getting funds for your business is a roller coaster ride as there are rises, falls, twists and turns.
Have you ever experienced that situation where countless of your brain is clouded with innovative ideas that it makes you want to jump and start that business in a snap? You may be prepared to take the next step, but your amazing ideas are hampered by the inefficiency of funds that you currently have.
Seeking for funds to start a business is obviously a difficult path. Investors who lack familiarity with a certain business may hesitate to shell out money for a relatively new venture. Due to inefficient funding, there are young and brilliant aspiring entrepreneurs who experienced rejection from potential investors.
Whether you like it or not, money is a huge part of the equation between starting a business and attracting the right investors and business partners. Thankfully, there are feasible solutions for newbie entrepreneurs like you who are struggling to get enough funding for their startup.
Here’s how:
1. Seek Help from Local Banks
One of the tried-and-tested ways to generate funds for a startup is to approach loan officers in your local bank of choice. It would be best to choose a bank that you are currently using for your personal banking needs. Set an appointment with a loan officer.
When setting an appointment, first impressions can influence how well your business proposal will go. Remember to look neat and professional. Do be mindful of the following tips as well:
- Choose your clothing. Do not wear your tattered jeans or your Hawaiian shirt. A business casual attire should do the trick.
- Prepare your business plan. Your business plan should be a breeze to read. It must also enumerate your startup’s forecast of future revenues and expenses.
During your appointment, make it a point to explain the reason behind the amount that you intend to loan. If possible, explain in detail how you intend to use the full percentage of the money you wish to borrow.
2. Seek Help from Venture Capitalists
A venture capitalist (VC) is an investor that provides capital to companies that have a strong potential to thrive amongst a sea of competitors in the industry. Venture capitalists are willing to take risks since they know that the money they will be investing will yield them massive return especially if these companies will flourish successfully. Normally, VCs prefer investing in businesses that belong in the software and technology industry. Still, there is no harm in trying.
3. Seek Help from Angel Investors
Angel Investors, or more commonly known as private investors, seed investors or angel funders, are a bit different from venture capitalists. While venture capitalists get funds from investment companies, large corporations, and pension funds, angel investors use their own money. Before an individual or company can be considered as an angel investor, they must first meet the minimum qualifications. Among these qualifications include earning at least $200, 000 in their yearly income and possessing at least $1 million as their net worth.
Angel Investors can also act as your mentors and decision-makers in terms of running your business. This is a role that not all VCs take on. If you’re lucky, angel investors can also introduce lawyers, accountants, and banks who can serve as viable connections in growing and gearing your business for long-term success.
4. Seek Help from Friends and Family
It can be pretty tricky to borrow money from family and friends. Stick to people who you feel and know will support you through thick and thin. Try seeking financial backing from your parents or siblings or even your closest friends and spouse. You can also offer them a partnership deal if you deem them suitable for running a company or business. It would also be best to approach friends and family members who are well-off and are free from any outstanding debt.
5. Seek Help from People Through Crowdfunding
Crowdfunding is the process of raising funds online with the help of family, friends, customers and individual investors. This approach is possible through social media and crowdfunding platforms such as Kickstarter, CircleUp, CrowdFunder, and Fundable. You can showcase your resources to a large number of interested investors and other individuals. When crowdsourcing, encourage your audience to interact with and share your fundraising campaign. Doing so will boost the likelihood of reaching potential funders.
6. Seek Help from a Business Partner
Having a business partner who is trustworthy and has the same ideology as yours will make your business thrive in the years to come. That said, if you can look for a strategic partner who has enough funds to support your business, then the more likely that you can position your business for positive growth. Around 85% of companies claim that working with a business partner is fundamental to their company’s long-term growth.
The Bottom Line
Venturing into a new business is a smart and bold idea, especially if your soul wants to escape the 9-5 rat race. On the other hand, becoming a business owner is not always a milk-and-honey kind of scenario. There are a number of significant factors that need careful consideration, from funding and building your business from the ground up to hiring the right individuals for your team.
As long as you have a solid business plan and you carefully choose the funding option that best suits your business’ needs, then you will likely increase the possibility of scoring more than enough to support your very own startup.
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