About to start a new venture? Well, these must be exciting times for you as you are going to be your own boss and float a new idea in the markets. One of the significant challenges for any start-up or a new venture is funding. While a short term loan could help, one should have enough capital to hold on through the rough times. However, looking at the current state of affairs and a tougher economy, securing funds is easier said than done.
Well, here are some great ideas on how to have the cash inflow for your billion-dollar idea and venture.
- Bootstrap – Bootstrapping is another name for self-funding and is one of the most effective ways to finance your venture. One can look at their own savings and ask close family and friends to contribute. As there are fewer formalities and no complexities when you bootstrap, it is looked upon as an effective way to fund your venture. Friends and family members are often willing to lend at no or minimum interest. Before you ask your family and friends, look at your credit cards, savings account, and any home equity lines.
- Alternative Sources – You can look at other sources of funding in the market or industry. There are micro-loan organizations who are eager to lend to entrepreneurs, and if their venture is for social good, they provide loans at very low-interest rates. You can campaign and create a certain amount of money.
- Crowdfunding – Another great funding option is crowdfunding, and it is an effective way to raise money at a very low cost. Your friends, family, and strangers would willingly raise money for your project. However, you need to offer incentives for their support. Crowdfunding has been rising in popularity lately and is a great way to look for funds. The best thing about crowdfunding is that it helps to create not only funds but also generate interest in your project or venture.
- Angel Investors- While there are Angel Investors in the market, you need to be experienced when pitching an angel investor and win their interest. The investors must get a lot more confidence in your company and be sure of its success even in economic turmoil times. You need to show your credibility and your company’s ability to survive in any kind of tough economy. There are Investors with loads of money that they are willing to invest in a good venture.
- Venture Capital – Venture capitals are another source of funding, but these funds are professionally managed and usually invested in larger projects with huge potential. One needs to have that expertise to face the litmus test of evaluation of their venture and the strength of its sustainability and scalability. Investors would like to see their funds multiply.
- Bank Loans – Another standard and common way to raise funds are via bank loans. One can get a working capital loan and funding for their businesses. Typically, most entrepreneurs look at banks when they think about getting some financing. However, the funding process from the bank can be lengthy and time-consuming at times. A lot will rely on the project report, based on which the loan is sanctioned.
- Credit Cards and Selling Assets – It might seem tough, but one might have to sell their assists to get an urgent short-term fund or to overcome the crisis situation. Business credit cards are other means of getting readily available finance.
Well, if you are new to the business, consider the pros and cons of each funding options and go for the best choices. Keep the funding assistance at the lowest and at the minimum interest rates and flexible terms.
