5 Funding Techniques to Kick Start Your Business
So, you have a great business idea. You have created a business plan and are very excited to start working on your brilliant idea. But you cannot start executing your plan until you have funds. Unless you have enough money to fund your business yourself, you need to look for various funding techniques to get the capital for your start-up.
Here are 5 of the best funding options you can consider for your start-up.
Crowdfunding is one of the newer ways of funding a start-up. There are some websites where you can run your crowdfunding campaigns. It works on the simple principle of contributing money towards causes that one believes in. Anyone on the website can contribute money to your start-up if they think that the idea is brilliant and has a future. People who contribute money also usually make online pledges that they will pre-buy your products or services, give a donation or earn some reward.
Crowd-funding is not easy. There are thousands of campaigns each year on crowdfunding websites. It is difficult to get attention unless you have a rock-solid business plan and are able to garner the attention of your target audience.
2. Venture Capitalist
You can also fund your start-up by looking for a venture capitalist. These are professional groups that look for great start-ups to fund. They have the resources and money to fund start-ups which can help kick start your business. It is the ideal funding option for many entrepreneurs.
However, there are some downsides to choosing this option. You may have to give up some control over your business or your plans. They also look for a very stable and strong business idea to work with. So, if you are not ready to make these compromises, then finding a venture capitalist may be your best bet.
3. Angel Investors
Angel investors work the same way as venture capitalists. However, they are not an organisation. They are run by single individuals. They will fund your business on different conditions. The most common of them is that they may want a large portion of your company. When you make money from your business, they will also make money. However, this doesn’t seem like a bad option when you are the one who’s in charge of the business. It gives you control over your business, and you can always turn to an angel investor for mentorship.
4. Small Business Loans
The first thing that comes to an entrepreneur’s mind when they are looking for funding is going to the bank. Different banks offer different kinds of loans to help start-ups with their funding needs. While getting a loan may be a good idea, you will need to have an elaborate business plan. You will also need to tell the bank how and where you will use all the loans you are getting.
If your loan application is also rejected by the bank, then you can consider other financing options like express loans, one such provider is Sunshine Loans with loans up to $2,000 which can be considered as a reliable & convenient decision. Many banks refuse loans to first-time businesses as they are not really sure if they will be able to pay back the bank or not.
5. Seed Funding
Seed funding is another funding option for your start-up. This involves getting funding from your friends and family. You may need to give a certain part of your equity to obtain these funds. Or, you can get a loan from them and decide on the repayment method. Proper paperwork is necessary even if you take money from your close friends or family. This will prevent complications later on.
These were some of the funding options that can help you kick start your business. Choose one that you think is the most suitable for your business idea.