Ten (#10) Potential Startup Funding Strategies

Startup funding is one of the toughest factors in launching a new business. Most entrepreneurs struggle to gather the right amount of funds. To be more precise, even smart ideas fail within a short span of time, due to funding issues. This is why you need to be careful with how and when you plan to arrange for startup funding.

Here are the top ten sources for funding your business.

#10 Bank Loans

One of the simplest and convenient ways of gathering funds for your startup would be through bank loans. You can aim for long, mid, or even short term funding. It is important to ensure that your business would generate enough revenue, which can be used to repay the loan.

Advantages:

1. Bank loans are flexible.
2. Bank loans are easy to secure if your papers are in place.

#9 Venture Capitalists

If Venture capitalists are famous in your region, you must consider showcasing your business model to them. If the idea is approved, you are likely to secure a good amount of money. The primary role of venture capitalists is to help startups.

Advantages:

1. Venture capitalists are highly business-oriented.
2. These are experts, who can help you understand if your business model would work or not.

#8 Crowd Funding

In the past few years, crowdfunding has gained pace and fame. This is a new platform for startup funding. Famous sites for crowdfunding would be kick starter.

Advantages:

1. This method is exciting for the young, and the energetic.
2. There are many proven strategies to help you with crowd startup funding.

#7 Lease

If you have existing assets, you can consider leasing them. This will give you tangible cash for starting the venture. But, you need to careful with the assets you invest.

Advantages:

1. The immediate inflow of cash.
2. You don’t need to worry about repayment.

#6 Angel Investors

Angel investors are experts who help startups begin their business. These investors always look for creative, and inspiring ideas. In order to attract an angel investor, you need to be specific with what you need to achieve.

Advantage:

1. Connecting with angel investors is simple. Mainly because they understand the language (business, industry, and niche) you speak.

#5 Incubators

Startup funding incubators have also gained momentum. These are companies that join with bigger brands, communities and universities to keep the business going. The incubators will help you with infrastructure and other resources for launching your business.

Advantages:

1. You will be able to secure “priceless” resources at a reduced, and affordable price.
2. You will be able to make use of the “brand” you are joining hands with. This will help with influencer marketing.

#4 Bootstrapping

When it comes to relying on external sources of funds, you will be accountable to the investor. In fact, they can control most of the decisions you make. This destroys the actual purpose of starting a business. Bootstrapping is a way of starting your business, without relying on anyone else.

Advantages:

1. You don’t need to rely on anyone else.
2. You can build your own company, in your own terms.

#3 Development Organizations

When your business needs oodles of money, you need to reach out to multiple sources. Or, you can approach local economic development organizations.

Advantages:

1. You get money at low rates of interest when compared to banks.
2. They will not ask for any repayment guarantees.

#2 Friends and Family

Sometimes, you may need to ask your dear ones for money. This kind of startup funding comes with many obligations and restrictions. But, if your business doesn’t demand lots of money – it could be a wise move.

Advantages:

1. Reduced Stress
2. You will get a new business partner, to share views and “losses”!

#1 Customers

Finally, you can request for money from your customers themselves. After all, the product you are building is for someone else. According to experts, there is no harm in considering customers as a funding source, over a revenue stream. You will read about this in the famous book “Bootstrap to Billions”.

Advantages:

1. You are bound to work, and create a product/service that makes an impact!