After a less-than-optimal year, it’s time to get to work. You’ve had nothing but time to come up with great ideas and now you’re ready to take the next step. How can you turn your idea into a business? To get off of the ground, you’re going to need funding. Unless you happen to be sitting on a large pile of cash, you may need help to do it. Here are 4 methods of financing a startup that we think are smart moves.
Make Use Of Your Assets
You may not be sitting on the aforementioned large pile of cash, but you might have assets that you can leverage to get the funding you need. If you own a home, a car, or maybe you just invested in BitCoin at the right time, you may be able to use these as collateral for an asset backed loan. These types of loans can be great for entrepreneurs who don’t have a steady income or have trouble verifying the income they do have. Until your startup brings in a steady flow of money, non-traditional loans like these are probably your best bet to secure financing straight from the bank.
If a bank loan isn’t for you, another possible source of income is an outside investment. Investors generally fall into two camps: Angel investors and Venture Capitalists. Angel investors tend to be verified individuals who invest their own money into new businesses in return for a stake in the company or a percentage of the profits. Often, they invest based on a strong belief in the entrepreneur, so if this seems like the right investment route for you, get ready to sell. Venture Capitalist, on the other hand, usually refers to an investor who uses pooled money from companies or pensions to invest in new businesses. Generally, they have a lot more funding to give but are looking for an especially high rate of return. If you think your startup could be the next big thing, venture capital might be the best option for you.
Crowdfund Your New Venture
If your startup hopes to be consumer-facing, crowdfunding might be a smart option for your business. Crowdfunding, though more erratic than other options, can offer substantial benefits to an entrepreneur that more traditional funding sources cannot. A creative campaign on a site like kickstarter could go viral and end up functioning both as the source of funding and as advertising for your new company. Also, owners who are able to crowdfund their projects get to keep a larger percentage of the profits, because they do not usually trade a stake in their company for money. If you have a large social network and a head for social media, this might make the most sense for you.
Bring In A Partner
Starting a company is a big undertaking for anyone. Getting the company off the ground is the first major hurdle, but the work doesn’t end once you have the funding. You have to work constantly to continue to grow your startup in order to keep your business functioning and profitable. If you aren’t sure you can maintain the level of work necessary, consider bringing in a partner. A partner is different than an investor, in that they can supplement your skills with their own and share the labor of running the startup. Of course, you then have to share the profits as well. Still, bringing in a partner for your business increases your chances of funding your project yourself, because you now have more assets with which to bargain.
Any of these options can help you get the funding you need to take your business from dream to reality. Consider your needs and your options and find the funding source that’s right for you.
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