To start a business, you need funds and in today’s open economic system, it is not hard to raise funds for your business. Given below are the 8 ways that can help you get the desired fund for your startup:
1. Contact top business schools
Contact the top B-schools with most successful business programs. Usually, these schools have a strong business network of renowned investors and business personalities through their faculties, guest speakers, etc. You can ask them for guiding you in the right direction.
2. Search for Angel investors
Once entrepreneurs have made a successful venture and have created their own wealth, many of them look for startups to invest the money back into the same industry. They are called angel investors. Along with the funds, startups also get to enjoy the guidance and connections of their angel investors.
3. Use Crowdfunding platforms
Crowdfunding is about accumulating funds from several individuals in order to finance a startup. You can use social media and crowdfunding websites to get access to a large number of huge people to get investors for your starting venture. It is an ideal choice for those who have an in-depth knowledge about their industry.
4. Ask Family and Friends
You can ask your family or friends for a loan or even get them into your new firm as a partner. However, you need to be careful when getting funds from your friends or family as unfavorable circumstances might cause a rift between you and also put a strain on your business. It is better to get money with a properly documented agreement.
5. Apply for Bank Loan
This is one of the oldest and most common ways of obtaining funds for starting a business. If you meet their criteria banks may give you the loan. Your banker may ask for guarantor before sanctioning your loan. And you might also be able to get a loan against your property as a collateral security.
6. Investment from Venture Capitalist
Usually, venture capitalists invest during the initial stages of a new business. They look for the businesses that have high potential growth in future. Earlier, venture capitalists used to get the equity share in the business in exchange for the funds they would invest. But now they demand a combination of debt and equity.
7. Look for a partner
If you might have the excellent business idea but do not have the money, you can look for a partner to fund your business. However, when choosing a partner, you must ensure that you and your partner’s interest lies in the same goals or a conflict may arise and it will be your business that will suffer.
8. Begin with Self-financing
It is also referred to as bootstrapping. It is an efficacious way of financing your startup business. It can be difficult to get funds through other sources without showing any strong potential for future growth and success. You can invest your own savings and it will give you a complete control over your business without any interference from the outside parties.