Breaking free from corporate 9-5 jobs and starting a business is never easy. You may have the passion, the persistence and the right attitude, but business startups, small or big, need up-front financial capital to really get started.
Here are some ways on how you can raise the capital you need to launch your business:
Your own pocket. If you truly believe that your business is viable and that you can make it work, there’s no reason why you shouldn’t shell out your own cash.
Putting your own financial well-being on the line is a huge risk, but you can’t expect other people to invest in your business if you yourself is unwilling to invest in it. Of course, don’t use everything up, you still need to have emergency funds always at the ready.
Friends and family. If after putting your own money on the table you still fall short of the needed capital, you can then start tapping into your circle of family and friends.
Approach family member or close friends who are financially well off. Show them your business plan and tell them that you’ve already invested in it so they know you’re serious. If they decided to invest, keep them involved as the progress of the business.
Crowdfunding. Thanks to the internet, raising capital for your business has never been easier! Crowdfunding is essentially small amounts of capital pitched in by large amounts of individuals. Websites like Kickstarter and Indiegogo are the most popular crowdfunding platforms.
Bank Loans. The bank will scrutinize your funding request more than your family and friends. Present your business plan together with a comprehensive market research and revenue expectations.
Seed Funding Firms. Seed firms, just like Angels, invest small amounts on early stages of a promising business. Because seed firms are companies, approaching them is much easier than approaching an Angel investor. Just Google the word “seed funding” and you’ll be able to see a huge resource of seed companies. You can then visit their websites and contact them from there.
Seed firms invest in the earliest stages of a business, so they are basically investing into the people just as much as the business idea. This means that, as the business owner, you should pitch yourself just as much as you would your business.
Venture Capital Firms. VC companies invest other people’s money in a much larger amount than what seed firms normally invest. VC investments, averaging several million dollars, come in the later stages of a startup’s life, are harder to get, and come with more stringent terms.
If you’re an entrepreneur looking to get connected with potential investors, joining an entrepreneur summit like the MACsWomen’s Summit & Expo is a good way to start.
How were you able to launch your business? Did you need a large starting capital or did you start with just a few dollars? Ever tried pitching your business to investors? Any tips you can share with startup entrepreneurs out there?