Raising funds for your business is the major task every startup has to face. However, funding is the bloodline of any business. As a startup, your business faces many challenges, but none are as big as finding money to get everything off the ground. Check out these Realistic ways to raise funds for your business.
It is also known as “bootstrapping”, you can self-fund your startup or also can raise some capital from your family and friends at the initial level. Investing your savings, PF’s sounds risky but is the safe way in terms of kickstarting and establishing. Once established and getting enough out of business then you can move to other funding ideas in order to grow your business. Thus self-funding becomes one of the most prominent ways to raise funds for your business.
Small business loan-
Raising money from banks is the most stringent way. Startups seeking money from banks need a good business plan, profitable projections and some of their own money in the game.” Seeking any type of capital can be a full-time job in itself which is why companies like All Business Loans can be a great way to take the legwork out of it. Another reason to pursue debt financing is that you aren’t giving away a piece of your business.
Angel investors stand out from other types of funding options because they are always on the lookout for the next business or idea to invest in. Many of the biggest tech companies today, including Google and Yahoo, were funded by angel investors. At its most basic deal, taking money from an angel almost always requires you to give your investor some share of equity in your company. Angel investors and any related transactions must be registered with the Securities and Exchange Commission (SEC).
Similar to angel investors, venture capitalists have money to invest, which they want to invest in young, up-and-coming businesses with a high potential for growth and monetary returns. Venture capitalists typically also look for a share of equity in exchange for their investment but are also interested in having a voice in the direction of the company. VCs are looking to make money on their investments, and many feel the best way to do this is to have some control over how the company is managed.
Reserved largely for non-profit organizations, microloans are granted by institutions to individuals who would not normally qualify for a traditional bank loan. Instead of gifting a donation to the non-profit organization, microloan organizations allow individuals to invest in economic opportunities. Microloans are very popular in small and developing nations as well.
Crowdfunding is one of the ways to raise funds for your business, the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together and has the potential to increase entrepreneurship by expanding the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives and venture capitalists.