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7 Top Tips To Fund A Startup

Companies / SME Jul 07, 2021 - 02:48 PM GMT

By: Mark_Adan

Companies

When it comes to starting a business, cash flow and money are everything. Unfortunately, your business cannot be made into a reality if you lack the funds. Thus, one of the biggest obstacles to starting a business is typically money. It's not even worth considering any other obstacles until you solve your money issues.

Luckily, there are plenty of different ways you can go about funding your start-up. In this guide, you'll learn about a few of them.


1. Family and Friends

One of the methods a lot of startup founders use when they are starting a company is leveraging their networks. Asking both friends and family for the funds you need is an attractive way to get funded. After all, many of them likely trusts you and they will be much more willing to lend you money than someone that doesn't know you.

You might be surprised by the number of people who will be willing to help you if you just ask. This is why it's always recommended to start with your friend and family when looking for funding. Typically, it will be the cheapest way to go about it because some might not even charge you interest.

2. Private Lenders

Getting your funding from a private lender can be a great way to go about getting the money you need to start your business. It's a much more attractive way to acquire the funding you need than getting it from the Government. It's also a preferable way to get the money you need than from friends and family for those that might feel guilty about asking. However, it can be difficult to choose the right lender due to the countless options available.

Not every lender is the same. Because of this, you need to research your options to try to find the right one. You want to check to ensure the lender you identify has a good reputation within the marketplace. You also want to ensure they have agreeable terms. Any private lender is going to ask for money. Therefore, you'll want to be certain you aren't dealing with someone that is going to cause further obstacles in the future.

3. Short Term Loans

This is another option that you could consider as a founder. If you can apply for and get approved for short-term unsecured personal loans without collateral, you'll be able to use this. However, you will likely have to pay much higher interest rates for these loans. That being said, they can solve your money issues quickly and they are generally easier to get.

4. Crowdfunding

This is a very popular way to get the funding you need as a startup. Crowdfunding's growth has been tremendous and there are a lot of players that you can go with if you are looking to leverage this method. You can start a Kickstarter, GoFundMe, or even get on Indiegogo's platform. These are excellent options for a lot of startups because they can get your idea in front of people that would be interested in helping you. Along with this, you don't have to worry about interest rates or anything.

With a crowdfunding platform, it solves two of your problems. For one, it gets you the funding you need. It also helps you find customers. After all, the customers are the ones that will be funding your business. This can help you generate sales before production. It can also be a great way to generate a lot of hype and interest about your business before you launch.

5. Angel and Seed Investments

It can be easy to find angel and seed investors because there are so many of them. A lot of people with money are constantly looking for places to put it. You'll be able to find these people online and even through your direct network. Finding someone that has money and who is looking to invest can be a great way to get your business funded. From SAAS to ecommerce – many businesses start this way.

Keep in mind, if you are looking to get investors, you'll want to have a quality and comprehensive business plan in place. They will want to see your business plan to ensure they are putting their money in safe hands.

6. Credit Cards

This isn't the ideal method of getting funding, but it can be a good short-term solution. If you require cash quickly, you can always leverage your credit card balance by using your credit cards. However, you should only be using your credit cards and not others. Keep in mind, personal credit cards typically have high annual interest rates. Therefore, you must accept these rates before going on a spending spree. You can rack up a lot of debt if you aren't careful with credit cards.

It's only a short-term option because you won't be able to get away with using credit cards to fund your business over the long haul. Not only do you risk ruining your credit, but you also risk heavy fees for interest down the line which is not conducive to a successful business.

7. Bootstrapping

This is the term that applies to any business that is making do without a hefty startup fund. Any startup that is bootstrapping is starting a business without major capital. To do this successfully, you'll need to find creative ways to get things done. Whether it's bartering services with other businesses or something else.

By bootstrapping, you should be able to effectively lower the total cost of starting a business. It can also help to ensure that you are keeping your entire business and the power within your business to yourself. When you bring in outside investors, you have to give away a piece of your business or some of the power in decision-making.

Conclusion

No matter what you do, you want to validate your product, service, or idea before seeking funding. After all, you don't want to spend so much time trying to get the funding you need when your idea isn't viable within the marketplace. You need to get real-world customers to try out your product or service. That way, you can test the viability of it and ensure that it's got a chance to be profitable in the future. Then be sure to visit USGrants for more information on funding your start up.

By Mark Adan

MarkAdanSEO@gmail.com

At Animuswebs.com, we specialise in content-led Online Marketing Strategies for our clients in the Marketing, Finance, Business industry and other sectors. With our professional writing team and our superb content creation programmes we achieve great marketing successes for our clients.

Copyright 2021 © Mark Adan - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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