Many of us have financial hopes and dreams. We have a burning desire to start a business. But funding – or lack thereof – usually determines when and if we ever get our company up and running. This is a sad state of affairs that we can easily change in our favor when creativity and ingenuity is applied to discovering avenues available to acquire much-needed startup capital.
It’s possible, in fact quite probable, that you have an amazing business idea burning within you. Even if you have perfected every aspect of your idea, it’s going to be impossible to create the business of your dreams without funding via startup capital.
Pay close attention to every aspect of your business. Think about your future goals. Analyze your hopes and dreams for the company. And out of the four types of funding opportunities that we’re about to share with you, take time to determine which one provides the best chance for achieving business success.
With four funding options, some will be more popular than others. Choose your favorite based on the information that we share with you below.
Our four favorite startup funding options include:
Venture Capitalists
By bringing venture capitalists into the fold, you are essentially taking on a hands-off partner willing to invest in your vision. After presenting your business idea to a venture capitalist, the firm will determine if your business proposal has the potential to make real money.
At the end of the day, venture capitalists are in business to help fund startups. It’s their main purpose for existing. They want to find smart, savvy individuals with brilliant ideas that could turn into serious capital.
For many small business owners and startups, getting into bed with venture capitalists is the perfect marriage. On the other hand, some people do not enjoy being beholden to stakeholders. They prefer borrowing money as opposed to taking on investors.
Ultimately, you have to take your financial temperature before choosing a method to fund your startup. If you enjoy working with partners, venture capitalists will fit perfectly with your vision. If not, you’ll have to go a different route to raise money to fund your startup. Don’t worry because we will present other options that cater to everyone’s needs.
Angel Investors
Angel investors are very similar to venture capitalists. The major difference is that angel investors are typically individual investors or small investing groups as opposed to larger investment firms.
Another difference between angel investors and venture capitalists is that the angel investor typically wants a bigger portion of the companies that they invest in.
As an example, let’s say you present your idea to an angel investor and she absolutely loves it. She is willing to invest heavily into your company. But, instead of owning a smaller percentage typical of venture capitalists, this angel investor could require as much as a 49% stake in your company.
When getting down to the nitty-gritty of it all, acquiring funds from angel investors happens to be the most popular method for funding a startup at this time. And it’s an excellent option since the startup owner gets to retain full control of the company while receiving the funding needed to get their business off the ground.
There are other perks to choosing angel investors as well. Most angel investors have vast business experience. By going into business with someone who has years of experience under her belt, you can tap into this vast array of knowledge at any time. It’s almost like getting paid to receive a high-class mentorship and business education all rolled into one!
Crowdfunding
As far as funding startups is concerned, crowdfunding is the new kid on the block. Although it might be the newest way to acquire funding for your small business, it’s also incredibly popular right now, and rightfully so.
Crowdfunding has reached the height of popularity because it gives startups an opportunity to tap into a community of people interested in their products and ideas. It entices individuals to invest in products or services before they are ready to go to market. And by investing, the individual investor will receive bonuses and incentives for taking a chance on this new and interesting startup opportunity.
Even though crowdfunding is currently the latest trend, startups should be aware that there are literally thousands of competing campaigns vying for investors’ attention. And to make matters worse, hundreds of crowdfunding campaigns go unfunded every year.
If crowdfunding seems like the ideal way to acquire investment funds for your startup, you need to do a few things to ensure that your campaign is successful.
First, choose the right crowdfunding platform to meet your needs. Make sure to do your research and compare the fees involved with all the many options out there.
Next, you have to develop your story and make it so enticing that investors can’t help but fund your campaign. A good story means everything to your success. So create an entrepreneurial underdog story and watch the funding come flooding in.
Lastly, you need to incorporate social media into the mix. By utilizing social media sites like Facebook, Twitter, Instagram etc., you will expand your campaign’s reach and provide your startup with the biggest opportunity to achieve your fundraising goals.
All in all, crowdfunding is an excellent way to fund your startup. Just be aware that many campaigns go unfunded every year. So utilize this tactic wisely to achieve funding success.
Small Business Loans
Finally, we wouldn’t be doing our job correctly if we didn’t mention small business loans. Many young and ambitious entrepreneurs can go directly to a bank to fund their business idea. While this might seem like the hardest avenue to attain financing, it also has the potential to be the most rewarding if you receive a small business loan with a low interest rate.
Before walking into the bank, create a rock-solid business plan. Show them how you plan to use every penny of the loan to grow and expand your business. This will show the loan officer that you are responsible and ready to take on the challenge of starting a brand-new business.
Conclusion
Funding a startup never seems easy. But it certainly is possible. Use these four foolproof methods to attain funding for your latest business venture and watch the financing come pouring in.
About the Author: Wendy Dessler
Wendy is a super-connector with OutreachMama. She frequently writes about the latest advancements in digital marketing and focuses her efforts on developing customized blogger outreach plans depending on the industry and competition.
Twitter handle: Outreachmama
