You pack your bags, buckle your shoes and start your journey as an entrepreneur, it is then you realize that raising funds for your startup might be the most frustrating or discouraging aspects you face in the journey.
You may be passionate about your idea and try to convince your potential investors. However, you might not get funds to keep afloat.
Here, we try to simplify things for you. These hacks can help you to find out where to raise funds for your Startup.
1) Open Your Wallet First
Check your wallets, savings, personal investments, or your retirement accounts. It is quite a risky job, but do not expect funds from others until and unless you put some of your money in. Experienced and knowledgeable investors want to see how founders display their confidence with cash.
2) Friends and Family
People like to invest not only in the idea but also they invest on the person who they trust. So, the near and dear ones are those who can invest in your venture as they know you better than anyone else.
The first round of financing is often given by family and friends. It gives you sufficient funds you need to set up a foundation to your Startup and create a value for your next round.
But be careful, getting funds from the family can be risky. Your family gets together might end speaking only about the progress of your Startup. If you incur a loss in your business, there are chances of loosing your relations too. Also, borrow money from those you feel can afford the loss.
Crowdfunding is one of the easiest ways to raise funds for your startup business. Basically, crowdfunding is a project by raising money from a large number of people who contribute relatively small amount. This typically happens via the internet. This actually works for everyone, especially those who can’t get traditional loans.
4) Community Banks
It is generally tough to win a bank loan, but if you have been approved by the banks, then they are worth approaching. If you already have an experience in the business field and show steady growth and profitability qualities which the bankers actually look for, then you are all set to launch a Startup.
What is interesting in taking a loan from the bank is that they offer the best interest rates. But what turns down an entrepreneur is the fact that it is sometimes hard to get a loan from the banks.
5) Third Party Loan Guarantees
Nowadays, third party loan guarantees are becoming popular in recent years. In these deals, an entrepreneur teams up with an angel investor to get a bank loan in which the angel investor personally guarantees.
The bank gets more comfortable while lending money to these angel investors. These third party loan guarantees can help you get a loan which the bank might find it hard to give to a Startup entrepreneur.