So, you’ve got everything chalked out for your startup. The framework, the strategy: it all seems to be in place. Great! But for any idea to become a reality, you need an investment. Getting them is not easy. If your idea turns out to be a success, you’ll get a lot of investors, but what about the money to begin from scratch? If you’re really committed to your plan and are looking for funding, this article is for you. Here are 7 ways in which you could fund your business idea.
Bootstrapping is a very good way to begin with your new business as all decisions involved would be under your control. You could use some money out of your saving accounts or liquidate some personal funds. Careful use of credit cards could also turn out to be of use for you. However, you must ensure that the money that you are spending will yield results so you can recover it, or you could end up losing a fortune. Read all about bootstrapping here.
- Using Personal Connections
If bootstrapping methods aren’t enough, or you would not like to spend any time now, you can try speaking to friends and family to support your idea. The plus point of such investments is that this is generally seen as a grant, without any liabilities attached. Having investors who share personal relations with you is great, as they would be willing to take the risks involved. Like bootstrapping, in this case too, you could be making your own decisions.
- Bank Loans
You could take a bank loan! Visit local banks, and after you have explained your situation, look for loans that they are willing to offer. If you associate your company from its earliest stages with the bank, you should be able to familiarize the bank with your organization and secure loans easily in the future.
- Angel Investors
If your business begins to grow profitable after your initial investment, you can look for angel investors – people who have money to spend and will invest in your company, in return for shares or convertible debt. You can find them easily on the internet or through contacts in the share market. If they find your business appealing, they will set up a meeting and you could get a very large fund.
As the name suggests, crowdfunding refers to the collection of funds from a large group of people. There are websites that organize the entire process. It only takes a few minutes of your time to look for crowdfunding websites. If you don’t qualify for a bank loan, don’t have personal resources and do not wish to ask your personal contacts for funds, this might be a very good alternative.
- Alternative Funding
There are certain websites that lend small funds to entrepreneurs, and if you can fund your startup for less than $5000, this might be your best choice. There are other websites that can connect you to potential investors, allowing you to explain your idea and request a fund. You may also try out an internet campaign to pick up funds, although this is quite rare.
This is an idea which has been tried and tested in the past. You could form a startup with the partnership of an individual, where the idea would be yours and the investment would be borne by your partner. Anyone from family to friends or acquaintances could be your partner. Many businesses are known to have been born out of successful partnerships and if you have the right idea and get the right person, you should do very well.
If you have a business plan that can impress investors and show the value of investing in your idea, this plan should work out fine. It is important to remember that investors will only be attracted by an idea that has a probability of working out in the future. Once you receive your necessary capital, it is only a matter of time before you’re able to reward yourself and your patrons with the benefits. We wish you good luck in your ventures.