Need more money to fund your startup business this year?
While it’s entirely possible to get started in investing and launching a lean startup by bootstrapping and using guerilla marketing tactics, money can make things feel easier and go bigger, faster. Here are six ways to fund your venture and get to the next level in 2017…
Small Business Loans
Traditional small business loans from banks have been notoriously difficult to get for years. That may not have changed much, but there are a variety of new sources and options which can be much easier to gain capital from. Those who are financing real estate as a part of their business may have even more options with a good line up of crowdfunding portals, new specialists offering small business lines of credit, and merchant advances from companies like PayPal and Shopify. Peer-to-peer lending sites like Lending Club are now heavily marketing business loans which they then piece together with funding from the crowd, while some banks have partnered with new channels to offer loans and lines of credit under third party brand names.
Venture Capital funds are still active and are constantly looking for potential entrepreneurs and startups to fund. Note that these capital sources are most likely to fund existing businesses which already have a god track record of success, and may have already secured seed funding and ‘friends and family’ rounds of financing before.
- Friends & Family
If you’ve got a great business idea, investment model, or profitable startup, you are going to want those you care about most to benefit from that. Help them, while gaining financial backing for your venture from people you like and trust. This can be in the form loans or taking equity positions. Just make sure you preserve your relationships.
- Personal Savings
No one has gotten rich on savings accounts. Yet, tech startups and real estate have made many millionaires. Sooner or later that ‘scared money’ in the bank will get eaten up by minor emergencies, inflation, or shopping splurges. It can be smart to have some cash reserves, but once you have 3-6 months’ expenses as a cash cushion, then use your cash to invest and multiply it.
Equity partners are a great way to gain more capital without having to take on the burden of debt. Smart partner choices can add a lot more value too. Look for people who will energize you and hold you accountable to keep pushing you toward your goals. Look for those with the connections and experience you don’t have, and combine your strengths. Good partner choices, backed up with good paperwork that will protect you, can absolutely help in gaining traction and reaching higher levels of success.
Angel investors and private lenders are another great source of capital. They may come in as equity partners, with loans, or a combination of both. This is typically a necessary step between friends and family rounds and obtaining VC funding. For some it is all they need. The rates and process can be a lot more attractive than borrowing from banks or conventional lenders. Some find these funding sources elusive, but more and more affluent individuals are looking for opportunities like this. Look for lists, databases, and software which can help you pinpoint and reach out at scale, while working local contacts and networking opportunities.
For those that want to raise funding for a business or investment venture this year will find many options. It’s all about having a plan, a good pitch, and a strategy, as well as the tools for making the right connections. There is plenty of money out there, if you know where to look and how to present.