Have a burning idea but no money to start the business? I know how it feels. Fundraising is a problem that many entrepreneurs struggle with when starting out and this is the reason why many businesses don’t get off the ground. Even if you have a brilliant startup idea, nobody is waiting to throw money at you so that you can turn your dream into reality. So, what to do? Well, there are a lot of ways through which you can get funding for your startup. This blog will reveal five proven hacks that will get your startup funded.
Technically, bootstrapping is not a source of funding, but it saves you from all the trouble since you don’t rely on anyone else for the funding. Sometimes it’s hard to convince someone to put faith in your idea and give you money, so self-funding is a good option. So, if you are attempting to start a company, then use your personal finances. Once you get the business off the ground, use the operating revenues to move a step ahead. For a startup, every penny counts, so bootstrap at every stage of your business to raise the fund easily.
How to Bootstrap Your Business?
- Cut down on the basics to save money.
- Develop good financial management skills.
- Conduct market research on your own instead of paying expensive focus groups.
- Find creative yet inexpensive ways to market your product or service.
- Rather than hiring full-time staff, outsource people to work for you. It will cost you much less.
2. Seek Help From Friends and Family
If there’s someone who trusts in your business idea and potential to turn it into reality, then it’s your family and friends. They are the people who love you and trust you the most. So, you shouldn’t hesitate in asking for a loan from them. If they agree to give you a loan, then it would be beneficial for you since you won’t have to pay any interest to them. So, talk to your parents, grandparents, successful siblings, friends, or even rich relatives. If you get lucky, you might get the money as a gift.
How to Get Money from Your Family and Friends?
- Share your honest business plan with your family, relatives, and friends. If they see potential, then they will surely help you.
- Don’t be afraid to share all the risks involved in the business. Take them in your confidence and convince them how you can make things work.
- Since you are taking money from your close ones, try not to lose it as it can put you and the person in uncomfortable situations.
One of the fastest and safest ways to get funding for your business is through crowdfunding. The reason is that you are raising small amounts of money from the crowd and it won’t ask you to give it back. The people giving you money just want the product or service that you promised to offer. There are many websites out there including Kickstarter, Indiegogo, and Patreon where you can post your business idea and ask people to raise funds for you. If the crowd feels that you are offering something promising, then it will donate the small amount of money that you are asking for.
How to Get Crowdfunding?
- Clearly show what your product is and why people should fund it.
- Tell people how much funding you need and set a timeframe.
- Choose the right crowdfunding website that can accept your idea and help you promote it.
- Make video shots of the product’s use cases.
- Interact with the audience on social media channels to spread your business idea.
4. Angel Investors
If you have ‘angels’ as your helping hand, then you can surely get your business off the ground. Well, raising angel investment is easy when you when the right connections. But, when you don’t, you should have a promising business idea and a killer startup pitch. Angel investors generally invest during the seed funding stages, so you can present your business idea at one such stage. Considering the risk of investing in a startup, angel investors don’t raise funds easily until the business idea seems profitable and beneficial.
How to Raise Angel Investment?
- Have a solid product or service and put together a strong pitch.
- Know the investors that you are seeking and then include the aspects in the pitch that they want to read.
- Build relationships early and don’t wait too long to pitch. If you are confident about your business plan, then go for it without waiting for the right time.
- Make sure the angel investors you are approaching are accredited.
5. Venture Capital Firms
These are the limited partnership or limited liability companies that provide funds for startups with the potential for a return on investments. Most venture capital firms look for startups that need funding in return for equity. The best way to approach a venture capital firm is by attending startup events or pitching sessions. But you can reach them directly through their websites.
How to Attract a Venture Capital Firm?
- To garner the attention of a venture capital firm, build a solid product, and gather as much traction as you can.
- Since the venture capital firms hunt for startups that can give them a return, assure them of the same.
- Make a pitch that is strong enough to cut through the noise and grab the attention of the VC firms.
- Build momentum. Keep the investors excited with updates about your business idea.
Whatever way you choose to raise funds for your startup, always believe in yourself and your ideas. If you are not able to convey your ideas properly, then nobody would take a risk to give you their money. Keep your motivation levels high because that’s only when you’ll be able to convince people why it is worth investing in your ideas. Good luck!
Working as an academic writer at Instant Assignment help for the last two years, John Noels has provided online assignment help to hundreds of students. He loves to update himself with the latest happenings in the financial world. Whenever he gets time, he addresses talk shows for entrepreneurs.