23 Jun 5 Tips To Get Funding For Your Startup
5 Tips To Get Funding For Your Startup
Every entrepreneur knows that finance is the lifeblood of any new business. Raising funds can be a difficult journey if you do not have a fundraising game plan. In most cases deciding whether or not the time is right to launch a new business comes down to funding.
It is vital to your funding campaign that you analyze every angle of your business and that you are clear on what your future goals are. One wrong financial move can be detrimental to the long term success of your business.
Here is a look at five tips on how to get funding for your startup:
1. Create a Reliable Business Plan
To ensure that your company receives proper funding you must have a reliable business plan. Investors need to be confident in knowing that you have your act together and that there will be no surprises or disasters down the road.
2. Take Advantage Of Your Friends, and Their Friends
Crowdfunding platforms, such as Indiegogo and Kickstarter, are popular choices with entrepreneurs these days. If you have never used a crowdfunding platform before they work like this: The entrepreneur puts a detailed description of their business on the platform, as well as their financial strategy for making the business financially successful. Consumers will read about your startup and if you can convince them you are worth the risk they contribute online.
Crowdfunding is definitely trending, but one must be aware that there are literally hundreds of campaigns each year that go unfunded, so it is vital to a successful campaign that you make your story and product stand out above the rest.
3. Be Diligent When You Look for Venture Capitalists and Angel Investors
A venture capitalist investor is a professional group that is looking for startups to fund. For many startups, this is the ideal situation. Similarly, angel investors work like venture capitalists, but they are much smaller in size. In some cases an angel investors may just be one person.
If you’re looking for funds from these sources, it’s important to know what you’re getting into It is not unusual for angel investors and venture capitalists to want a portion of your company, which results in them making money every time you make money. One of the best places to meet Angel investors is at Small Business Development Centers.
4. Do Your Homework Before Taking a Small Business Loan
Banks offer specialized options for small businesses. Entrepreneurs often find that micro-loans are a good option. The downside to working with a bank is that you have to account for every penny of the loan that you spend. Some banks also see first time business owners as too much of a risk, and charge higher than normal interest rates that make loans unprofitable.
When looking for a business loan, be sure to search all your options, even meeting with a financial advisor to be sure you understand all the long term implications of your loan. Creating a business plan which includes 5-year projections is a great way to see if your business will be profitable enough to be afford a loan.
5. Credit Cards
Credit cards are an option to fund your business venture if you have a good credit history, but with high interest rates, unforgiving payment dates, and limiting credit limits, they should be the last resort option for short term financing. There are , however, credit cards out there that are specifically designed for entrepreneurs. To look at your credit card options visit your local bank. They will guide you through the choices available and help you find the card that best fits your needs.