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5 Ways Startups Can Fund Their Businesses

It’s the oldest story in the book. You have an innovative product and have all the expertise to successfully run a startup but are set back by one major thing-capital. These days the ways of securing finances are endless which makes it difficult for startups to choose which one is right for them. However, with some knowledge you will be in a good place to make the right decision for your startup. This tutorial provides 5 ways through which can fund your startup.

  1. Crowdfunding

Crowdfunding has become insanely popular as a funding method in recent years. The first thing you have to do is to make a crowdfunding campaign on platforms like Kickstarter or Indiegogo. You will have to thoroughly describe your business; strategic goals, future financial strategies and target audience among many other things need to be mentioned. You would be required to mention how much funds you need and why you need it.  Anyone and everyone who reads it and believes in your dream will contribute towards the capital required. The people who give you money may promise to buy your product/service as it launches. Basically a community is formed around your product offering.

  1. Venture capitalist

These are professional groups that have successfully been made to invest in startups. Finding a venture capitalist to provide funds is the ideal situation for many. These groups have a large amounts of money available and have the sufficient resources to help your company succeed. However, you may have to give some control of the startup in the hands of venture capitalists’ since they are the ones providing the funds.

  1. Angel investor

Angel investors are similar to venture capitalists but are smaller in nature. They will provide funds in exchange for some portion of your company, like owning 49% of your startup’s shares. This way they are also making money while giving you money. Angel investors can be found in places like Small Business Development Centers or SBA and Gust.

  1. Credit cards

This may be the most risky option available for you but it is the best option as it will give you full control and ownership of your startup. However, you need to have excellent credit history to benefit from this. Instead of using your regular current account, use credit cards that are specifically designed for business owners.

  1. Friends and family

If none of the options seem attractive or feasible for you, then you can always ask support from your friends and family. Usually our loved ones provide us with the necessary finance as they would not want us to see you struggling.

5 Ways Startups Can Fund Their Businesses was last modified: April 24th, 2017 by Tammy Richards

Author:

Entrepreneur, writer, and marketing expert. Would like to share my experience and knowledge with Australian business owners, especially small businesses, and new starters.

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