Are you a startup founder and in dire need to find appropriate investors to launch your entrepreneurial scheme and scale your business? There is more than one approach to raise fund for your startup and get attention of the people with capital that you need the assistance of to kick start with your startup idea.
Startup visionaries commit the most typical mistake in regards to their fund-raising for their startup, and that is, they don’t begin soon enough. Most of them are of the notion, that they’ve the best idea and should take a little more time in developing their startup prototype, while thoughts for funding is allocated for another time. But practically, it doesn’t function that way.
Landing funds from a super potential venture capital firms, client, corporation or angel investors in definitely a tough row to hoe. But, in spite of that, acquisition of fund is easier due to so many resources available in the marketplace today.
Let us discuss seven ways by which a founder of a startup can fund his business and secure its future ambitions.
Fund your own idea and leverage your networks
This is the most common trait among any founders to kick start while the startup is still in its infancy. While the founder himself/herself invests considerably the project, the partners or team members also contribute enormously.
As this is the most preferred way of securing fund in the marketplace according to industry experts, yet, one must possess necessary savings and appropriate assets that would be utilized in the primary stages of the startup. By funding your own project, you showcase a strong determination towards your venture and delineate a strong message to the investors about your startups potential.
By depositing own money, you are projecting your willingness to take risk whatever the outcome is, that you support your idea at any circumstances and also you have complete faith in your idea of the startup company.
Not only is self-funding very advantageous in the primary stages, it also yields massively in the premium stages. Otherwise, most of your stake holders will be burdened with debts and equity share causing a setback to you company.
Angel investors plays a game-changing role in the inception of any startup as they’re highly acclaimed in the entrepreneurial world. In addition to funding, angel investors can come up with hefty experienced guidelines and invaluable mentor ship that are immensely critical to constructing the pedestal of any upcoming startup. Not only will they invest enormous amount of money in the beginning, they will also provide recommends of other viable investors.( If they wouldn’t mind sharing profits.
Getting in touch with a suitable angle investor is not any easy task. It require rigorous networking starting from attending seminars, conducting workshops, social media engagement, writing blog posts, connecting on LinkedIn and etc.
While seeking prospective angel investor, it is always wise to get in touch with someone who is in the same line of work your startup and has remarkable accomplishments in that genre.
The marketplace is filled with unlimited crowdfunding packages. It is the founders call to select the most rewarding package for their startup that would generate efficient revenue.
Not only is crowdfunding an excellent way of drawing funds, it also raises capital for any innovative project that can be used to finance the manufacturing of products in the initial stage. Especially within a shorter period of time giving more ample space for further renovation.
If investors notice a huge rush from the public willing to invest in your prototype, it will equally convince them to shovel their money in the right place.
Taking a loan
Another alternative way of getting a startup funded is by taking a bank loan. Not only does it keeps a strong hold of your startup initially, it also keeps your company business healthy given you have enough confidence that your startup will prosper in the first run and won’t come across extreme difficulties.
As founder of a startup, you will have to stay vigilant about the interest rates and collateral’s if you eventually have assess to such fund. In addition, ensure that can comply with all the terms and conditions that comes with the loan. There is no free money anywhere.
Venture Capital is also a unique way of raising funds. Venture capitalists are usually willing to found startups globally in billions pertaining to new technology and exponential growing market. Building connection with venture capitalists give access to additional resources ranging from business consultation, financial counselling, expert opinion, human resource management guide and variety of active support.
This methodology is both an active and passive way of generating publicity and startup exposure if the founder is confident and competent enough about his/her idea. Not only is this method a wild card ticket for your company, it will give you direct funding if you manage to win the competition. In addition, advertise your products before a wider range of audience and people would be curious enough for your product to be launched and hit the market.
The risk rate is low; the judges’ panel sometimes also consist of eminent investors and any outcomes would be rewarding. It’s a huge win if you don’t win cash prize as your participation may already draw many angel investors’ attention who may contact to collaborate with your idea.
Family and friends
“Charity begins at home” or, in a startups case; “funding begins at home”! Family and friends are well aware of their family members’ capacity and aptitude, who is embarking on his/her startup journey as its founder and will provide you with the initial money required regardless of the outcome. The faith in raising from family or friends will gave extraordinary power and support to any startup founder allowing you to mitigate risks, behave professionally and take boundless leaps.
Whichever financing plan you choose, make sure that you have a return on investment. Keep pitching your ideas to angel investors from the starting of your business, select every human resource suitable for the growth of your startup and strength your goal. One day, all these will contribute enormously to your startup.
Untill next time ! I wish you happy fundraising.