7 Ways to Fund Your Startup

When it comes to financing your new business, you never want to put all your eggs in one basket. There are so many ways to receive funding for your start-up, that diversifying your sources should be the way to do it. These improve your chances of receiving more funding, have your business’s needs met, all while still growing. Whether you choose a loan, a grant, or even funding your own business, you should know what options you have.

Self-funding

Also known as bootstrapping, this is a very effective way to finance your start-up. It can often be difficult to find funding, especially if you lack the proper network or plan to show how you can gain traction. You can invest what savings you have, and change your budgeting habits for a little while to continue to fund the start-up. Often people will tap into their retirement accounts and emergency fund accounts, this isn’t recommended. You can sell some of your assets to help fund your business such as quality silver, stocks, or personal items you no longer use.

A big advantage to self-funding your own business is the fact that you’re completely tied to your business. In a later stage of looking for investors, this can also look good for you and your business. While this may be stretching your resources, it can work for some start-ups and not for others.

Begging Loved Ones

This could have the risk of being a startup mistake as there is the potential to jeopardize relationships, so tread with caution. When asking friends and family for help, bear in mind that they are taking a risk for you. Ask for a loan rather than an equity investment from your loved ones, or else they’ll have a legal right to be involved. Be sure to prepare the paperwork professionally when receiving a loan from them.

Apply for Startup Accelerator Programs

Some communities and universities will have organizations that provide free resources to start-ups such as consulting, office facilities, and connections to get funding as well.

Try a Crowdfunding Campaign

One of the newer ways for start-ups to get funding, it’s a mix of a loan and a preorder. This helps generate interests that help market the start-up but also receive finances alongside. This cuts out professional investors and has normal people doing the investing. It can be competitive to receive crowdfunding as many other start-ups and businesses are using these platforms too.

Find an Angel

If you live in a Metropolitan area, then an Angel Investor could be more easily in reach. Angel investors are individuals that are keen on investing in start-ups. These wealthy business people don’t offer loans, rather they offer equity investments to have a share of your company.

Getting a Loan

For a start-up, business loans can be hard to obtain, many things need to be considered such as the health of your business, the credit, and how much funding you have now. Personal loans could be an option as these depend on your characteristics such as credit score and income, rather than what your business pools in.

Win a Grant

There are government funds available to be allocated to support causes such as education, science, medicine, and social needs. If you’re a start-up involved in any of these, then there may be a chance that you can receive a grant. While the application process for grants can be long, it can be helpful in the long run.

This is a contributed post.