If you’ve managed to come up with a good business idea and are looking into starting a business venture you have most likely already started to face the biggest obstacle in your way, namely funding. Finding the capital, you need to get your startup off the ground and running can be a long and difficult task. There are many different options to choose from and many sources recommending different paths you should follow. So, in order to help you out, today we are going to take a look at some of the ways to fund your first startup as well as when you should choose them.
Apply for Free Grants
Grants represent financial assistance from various organizations both government and non-government that can be a great boost for your startup as they don’t need to be paid back. This means applying for grants won’t really cost you anything other than the small amount of time you will need to fill out the application form. So, if you have an option to apply for a grant don’t miss your chance.
Crowdfund Your Startup
Crowdfunding is an interesting approach to funding a business venture that has gained a lot of attention in recent years. In essence, it allows you to go to the internet with your business idea and get financed through many individual payments from people all over the world. Depending on the type of crowdfunding in exchange for their payments, a good business solution is to give these people early access to your products, small tokens of gratitude, or in some cases, these donations don’t have to be repaid in any way because people just want to see your business succeeds. However, while crowdfunding is an amazing funding option, most people won’t be willing to give you their money unless your business idea truly is unique and draws their attention.
Apply to Accelerators
Startup accelerators are another interesting phenomenon that has appeared and gained traction over the past couple of years. Namely, startup accelerators support early-stage startups not just through financing but also through education and membership. They provide an experience of intense, rapid, and immersive education aimed at accelerating the life cycle of young innovative companies and as such is a fantastic option if you have no prior experience and are trying to launch your first startup.
Obtain Funding from Angel Investors
Another common path many startups take in order to get funded is to seek angel investors. The great thing about angel investors is that, unlike loans, their investments don’t need to be paid back, giving your business a better prospect for future growth. However, the downside is that this form of funding does require you to give up a part of your ownership of the company, which is why it may not be the best option if you wish to have full freedom over where you take your business.
Self-Fund Your Startup
If you have some money saved up you can also fund your startup from your own pocket. If what you have saved up isn’t enough to cut it, you can also look into selling some of your property or start saving up a bit before you get started. This approach has many upsides, mainly, it allows you the most freedom as it leaves the control of your startup fully in your hands, but; it does have its downsides as well. Investing your savings and livelihood into your business will tightly tie you to its success, which means that if things are to go south you may find yourself in trouble.
Apply for a Bank Loan for your Business
The internet has made it extremely simple for anyone to just fill out an online personal loan application and get a bank loan in order to fund their business. Additionally, bank loans are one of the most common and sure-fire ways to get the funding you need. Even though some people tend to point out the downsides of running up your debt from the get-go if you are able to plan ahead and be responsible, bank loans could be the safest bet you have when funding your startup.
Seek Money from Family and Friends
Another way to approach funding is to approach your friends and family to help. It may feel that it would be awkward for you to ask them for money, but, if you have a business plan and are able to stand behind your vision, they will surely be willing to support you. Recognize they most likely won’t be able to cover all of the funding you need but remember, every little bit helps.
Remember that it’s never too late to follow your dreams and start your first startup, even if the process of obtaining funding for it can be long and difficult. With that being said, it’s also important to remember that the type of funding you choose will ultimately depend on your personal needs and preferences as well as the vision you have for your future business. So, take every option into careful consideration and understand that this is one of the hardest parts of setting up a new startup so don’t get discouraged if you run into difficulties along the way.