Startups can take years and years of preparation before they get up and running. It’s common for entrepreneurs and innovators to run into problems with their product research and development, marketing, and, of course, funding.
However, you shouldn’t let your lack of personal finances hold you back from pursuing your dream. That’s what startup funding is for. Just because you may not have the savings to launch your business doesn’t mean there isn’t someone out there willing to invest in your vision or give you a loan to help you see it through.
Here are five ways you can get the funding you need to finally launch your startup.
1. Get a Business Loan
A business loan is the most obvious form of getting money for your startup when you’re in a jam. But, they’re not available to everyone – or ideal for everyone.
If you have bad credit or a pile of debt you may be denied the loan you’re interested in. There’s also the chance you’re offered one that is more risky than beneficial.
Do as much research as you can about different loans before you sign one in your name. Weigh the pros and cons of various terms like the lifespan of the loan, the interest it accrues, and the payments you’re expected to make.
More so, see if someone is willing to cosign your loan and help you get a better rate or if there’s a chance you can get a better loan on your own from a lender you haven’t yet considered. Always borrow through a bank, credit union, or certified lender like Vie Financial, though. The last thing you want is to end up dealing with a financial scam as you’re trying to start a business.
2. Build Your Professional Network
As nice as it is to get approved for a business loan, you still have to pay it back.
How great would it be to receive just as much or even more startup funding without having to worry about making payments on it? This is possible through the work of angel investors and venture capitalists. These are people who invest in your business by buying a share or making some other mutually-beneficial deal.
The way you “pay them back” is by ensuring the success of your business. This is what gives them the return on investment they’re looking for when they give you the money you need.
An investor’s or venture capitalist’s ROI varies depending on what’s been agreed upon at the time of investment. They may make a significant amount of money in stocks thanks to your partnership or receive a share of the profits your business makes in the first few years. Make sure you fully understand the agreement before moving forward.
3. Attend Startup Conventions
The thing about getting startup funding from an investor is that it may take a while to find someone who’s willing to work with you. Don’t be surprised if you find yourself in a lot of meetings and negotiations before finally closing a deal.
One way to speed up the process is to attend startup conventions and competitions. There are all kinds of events where you can go to meet fellow entrepreneurs and meet multiple investors in one day/weekend. There’s no limit to the results these kinds of connections can provide, but you have to be willing to show up and shake a few hands.
Plus, there’s a chance you win a bit of funding just by your participation in the event. Many startup conventions have pitch competitions for business owners to present their ideas to investors. There are also startup weekend competitions where you can create your business with a team and present for a financial prize at the end.
4. Join a Startup Incubator
A startup incubator is like a coworking space specifically-made for entrepreneurs. It’s where you can go for access to many of the things startup funding would provide.
Incubators support your research and development process and give you access to the mentors and creatives you need to get your business up and running. They’re all about collaboration and innovation, usually available at a cost-friendly price.
5. Crowdsource Your Startup Funding
The final way to give your startup the financial boost it needs is to crowdsource the funding. Crowdsourcing is basically asking your friends and family for money.
But, instead of asking mom and dad for $5,000 or using all of your inheritance money from grandma and grandpa, you ask everyone for a little bit of money. It’s amazing to see how five dollars here and fifty dollars there adds up.
When you have an idea that everyone can get behind and a character that people trust, you’re able to make some serious progress crowdfunding. This startup funding initiative is even more effective when you share your gratitude with others or run a contest to boost their interest.
It’s also possible to turn an online crowdfunding initiative into an in-person fundraiser or silent auction. You have to be financially smart about the investment you make for such an event in order to get the returns you’re looking for. But, there is a chance you make a lot of money for your startup this way.
Additional Startup Success Strategies
You can only research startup funding so much until it’s time to take action. It’s good to educate yourself about the opportunities available to you and how to make them happen, but at some point, you have to get to work.
Take a moment to consider which funding strategy is right for you, then see it through. For more startup tips and tricks, click here.