Starting a company is hard. You have to find an idea that will work, and then you have to convince people that your opinion is the best one out there. And even if you do succeed in convincing people, it’s not always easy to get them on board with putting up their money.
There are ways for you to secure funding for your startup without having to give away too much or give up any control of what happens next. But don’t give up just yet. You could still be at the helm of your company, but you would at least have the financial backing to do something with it.
Looking for funding is one of the biggest challenges you will face as a startup. And while there is no one-size-fits-all solution for this, there are some excellent ways to go about it. Here are five tips that can help you along the way:
1. Talk to your closest friends and family
If you are an entrepreneur with a startup, your friends and family are the only ones who are guaranteed to have faith in your idea at this point. They want what is best for you, so they will be willing to invest money into something that could potentially take off.
If you need more than what they can offer, don’t be shy about asking them for help. And it helps if you can give them an explanation of how you’ll make them more money than they invested. Of course, you will need to plan how you will pay them back.
2. Look for angel investors
Angel investors are people who invest their money into a startup to help it get off the ground. They will look at your company, determine how much they think it is worth, and then decide whether it is worth investing in.
You should find an angel investor with expertise in your field because they typically want a stake in your business before investing. They can also give you helpful advice on how to run your company and where to go from there.
3. Seek out government assistance
Since small businesses are the backbone of the economy, government institutions such as the U.S. Small Business Administration (SBA) can help you get the funding that your startup needs. The SBA offers small businesses a range of loans and other assistance programs.
For one, they can help you apply for different types of loans and will usually offer more favorable terms than other lenders would. As a bonus, an SBA-preferred lending institution is also more likely to work with your startup if you’re having trouble making loan payments because they’re not as stringent with their borrowing terms as traditional banks are.
4. Consider crowdfunding
Crowdfunding is a way of getting your startup’s name out there by asking for donations from people all over the world. It is prevalent now, especially with platforms such as Kickstarter, that make it easy to reach out to potential investors and allow you to keep track of whether these investors have paid up.
To get other people interested in investing in your startup, you have to have a great idea and the ability to convince potential investors that it will work. In other words, if you can’t sell your idea to them, they’re not going to give you their money.
5. Get a loan from a bank or lending company
Getting a loan from a bank or lending company can be a complex process, especially since banks want to see that you’ve already been successful in the past. Before going down this route, you’ll need to have some form of collateral and decent credit standing.
Banks and lending companies will typically ask for monthly installments when it comes to repayment terms. The longer you take to pay them back, the more money they’re going to charge you in interest.
If you don’t have collateral or good credit history, conventional loans from banks can be hard to come by. Some lenders will work with businesses like yours but expect to self-finance at least part of the loan.
Looking for funding for your startup can be exhausting because there’s no easy way around it. The best thing you can do is talk to people in your field and experts in the industry. You’ll also need to be willing to work with anyone who would invest money in you so they can see for themselves how great of an idea you have.
After all, nothing will happen if people don’t believe in your company’s potential. So if you’re looking for funding, don’t be afraid to ask for help. Reach out to as many people as you can and make sure that your business idea appeals to everyone.
