You are so excited to start your brand new business! You’ve picked out the office space, the couches, and even asked your friends if they’d work for you when the time comes. The only problem is that you lack one thing – funding. While you might have a couple thousand set aside, it won’t be enough to cover the costs of running your own organization. Where can you turn for reliable funding for your startup? We’ve selected the six best resources to get your business up and funded, including crowd funding options and small-business loan distributors.
While many crowdsourcing websites exist, the most popular are Kickstarter, GoFundMe and Indiegogo, according to Forbes. Kickstarter is the most popular and is used for many different purposes. Crowdsourcing websites are a good way to see how much you can obtain before approaching a private lender. By offering trades such as a free t-shirt for their donation, a relationship can be built between you and your investors. This leads us to our next source.
2. Angel investors
Think of show “Shark Tank” but subtract the arguments and commercial breaks. Angel investors are a source that can prove highly valuable to entrepreneurs looking to start their businesses. Entrepenuer.com defines them as individuals who offer loans in exchange for partial ownership of a company. Unlike venture capitalists, however, they focus on funding smaller businesses and offer a helping hand in making sure your organization succeeds. Use a service such as Angel.co to find your next angel investor. If you happen to need a larger source of income, however, our next option will prove most viable.
3. Venture capitalists
The name itself sounds daunting, but many venture capitalists want to watch your business succeed as much as you do. Venture capital firms gather donations from various wealthy individuals and put that money into a public pool. This large public pool can be used to fund as many businesses as they please in exchange for partial ownership of the organization. While similar to angel investors, venture capitalists typically work with larger organizations and businesses. Consider using a venture capital firm once your startup has grown successfully for a year or two.
4. Incubator offices
Picking your own office space and decorations sounds like a dream, but it will prove useful in terms of time and resources to start your business in a smaller space. As the name implies, incubator offices offer services such as a small amount of desk space, legal support, business planning, management training, and other services in exchange for 2-10 percent of the company’s equity. You may stay in these spaces for as long as you need until your company outgrows the office.
5. Trading services
Often referred to as “bartering your skills”, this option proves useful in terms of networking and loyalties. Say you are looking to start a personal training company and your close friend happens to own an IT company. If your friend agrees to service your startup, you can offer free workout consultations to every employee that helped your organization. This proves useful in terms of networking because you will gain valuable names and resources across many fields.
6. Your own funds
Using your own money to start your business is a given, but it is also important to not use too many of your own funds. Keep a healthy balance between investments, loans and your own money so if an emergency were to arise in your organization, you should have the funds to fix it. It also proves useful to use your own funds because you won’t have to give up any control of your organization.
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