Family and friends

For a lot of people raising money from family and friends will come with a lot of complications.  But there is nobody in the universe who knows you better than family or friends. So this also can be an effective way of raising money. Even though it’s not easy doing business with family, if you can get it right then it would be the right way for starting a business. If you can get the partnership and then investment structure then correctly it can be a very powerful thing.

Crowdfunding

You can use crowdfunding websites to raise capital. For a lot of people crowd funding is a new concept and there are plenty of different ways in which we can do crowdfunding.  The early stages of crowdfunding were very much product based. But now it has evolved a lot since then and there are many different methods now of crowdfunding.  There are equity crowdfunding systems which can have equity in your company on a platform where a lot of people can join and invest.  It has become one of the most popular new ways to raise money for your business. Sites like CircelUp are equity based platforms. They invest in your business with a certain agreed amount of returns to them. Some sites like kickstarter and Indiegogo are known as philanthropists that do not expect any profit from your company after investing in it. Crowdfunding is a very effective way In this day and age of raising money that you need.

Venture capitalists

Lot of people like the idea of getting a VC to support their startup. VC firms fund in the early stages of your company in return for an equity share. These people have been raised from limited partners and then make decisions on who they give money to because they also need to generate a return over a 10-year period. There are thousands of VC’s across the globe. They are constantly looking for goal oriented entrepreneurs. They get their job with your bright ideas. VC’s are firms that have dealt with several businesses, and they have access to incredible resources, contacts and networks.  If you’re looking into getting investment funds from VC’s, make sure that your idea is something big because they only work with large businesses.

Angel Investor groups

Angel networks are much better in that they serve as groups of several individual investors. Angel investors are wealthy people who are looking to invest in several startups.  You can raise fund offers from hundreds of such investors at a much reduced risk rate.  These investor groups are usually working side-by-side with an investment firm which provides a large pool of funds.

The way it works is that you’ll need to apply to one of those Angel networks based in your location.  Once you’ve been screened and accepted then you will be able to gain access to their group and get investment funds.  Once you are able to prove to them that you have a good knowledge about the industry you want to venture in and your expected returns on their investment, then the Angel investors will be comfortable with releasing funds for your startup.

Bootstrap

The basic idea in bootstrapping is that you can use your own money to start your business. It involves re-investing the funds earned after you have slowly started your business.   But how is this possible?  There are so many places that you can get the money from. One of them is cash savings that is most likely the best way to do this. Take into your own Savings and get started. Another one that you may have heard about a lot nowadays is “ROBS”.  Which stands for roll over business startup.

One of the pros of bootstrap is that you get to have a proven track record over time. When you reach out to investors they will know that you are serious since you put all your life savings into the business and they can quickly put in funds.  What better way to show professional investors that you trust yourself enough to fund the business with all the risk involved?  With bootstrapping,  you get to keep more equity and give up less later on when you ask them for money. 

Get rid of copycat ideas and invest in creating original value

In the new way of investor climate, the way to go for any company is digital with a clear go-to-market model. Creation and Innovation will be a game changer, and unless you are delivering some real value to customers and addressing some gaps in the market or major pain points, you can’t continue for long in the market.

Accelerators and incubators

Accelerators provide a great way to develop your baby business from scratch.  This method works even better for young entrepreneurs where they get to meet with other company founders, and also receive full time mentorship and guidance from top level industry investors. These incubators vary but they all provide you with a plethora of resources and tools that will get you going on and eventually open your own business operation.  You can refer to accelerators as coaching schools for new entrepreneurs.

Winning local Contests

The increasing number of contests has extremely helped to utilize the opportunities for fundraising. It supports entrepreneurs with business ideas to establish their own businesses. In competitions like these, you must have to build a product or prepare a business plan.

Being a winner in these competitions can get you some media coverage. You need to make your idea be noticeable in order to enhance your success in these contests.

Small Business Loans

Banks historically are careful about giving money to small companies but Some banks specifically offer loans to small businesses. It can be difficult to qualify. There are lending companies, however, who may be better equipped to help you get your business off the ground.

Trade equity or services for startup help

This is mostly called bartering your skills or something you have for something you require. An example would be negotiating free office space by consenting to support the computer systems for all the other office tenants. One other example is exchanging equity for legal and accounting support.