10 Ways To Raise Capital For Your Start-Up
Let’s face it, most of the businesses begin with great inception, and then move to the docks, because there could be nothing done to save it. Starting and planning one can be very interesting, and founders often immerse themselves in ideas so deep that they cannot rise above and think of the finances. Any business should have both the ideas and the finances regulated. Anyone of these ignored, can lead to major failures in the business. Some circumstances thus stand conclusive if your business can survive the market or not – hence it is extremely important to look into the financial planning.
There have been a lot of statistical studies on businesses and it has been found that most businesses die a natural death within 1 year of inception, due to several reasons. The most common one being that the capital money dies out. The capital money is the most important ingredient of any business, and if it runs out, it is but obvious that the business will completely crumble and die out. This is the same reason why businesses in their infancy always tend to rely on parent funders who will run the organization with the power of money. That is why most business founders go around seeking financial investors. The initial stages of the business are having an idea which will be the game changer, followed by detailed market analysis of your competitors, the market rulers, etc. after this, comes the part wherein you need figure out the investing part of your business. And this completely depends on you, which option you deem fit for your business.
Below Listed Are Some Of The Easiest Way Outs For Your Business
If you have saved enough and you are sure that you are good enough to sail through, this is what you can do. You don’t owe money to anyone, you needn’t worry about the losses and who to repay, it is just you, all along! You need to have funds channelized well, such that you can fund yourself whenever necessary and there are no obligations or worries of any sorts. This is the idea of self-funding. You could also get your money from family and friends, and together all of you can reap the benefits. There are of course some pros and cons to this setup, however. The pros are that the funds are easily available to you, and you needn’t worry about it at all. There are almost no involvements of other loans and you don’t owe banks or investors. The rates of interests are also extremely flexible. The only cons here is that a large business can never be funded with bootstrapping.
This is yet another very popular technique that a lot of businesses have taken to. Absolutely an innovative way to start off with a business, this one gives you money without any debt. Crowdfunding is an amazing platform that is provided to new businessmen who can come forth and share their business ideas to gather more people to the cause of their business and make them contribute in return. A business individual must pitch his idea, and then wait for the people to fund for the cause. This mostly works for charitable organizations, it is quite rare that other forms of business m=will benefit out of this.
Angel investment is yet another option for those who are starting their business. Angel investors have a huge amount of capital that they invest in other businesses if they find them suitable. They come together, scrutinize business proposals and then give out verdicts accordingly.
These people are always eyeing other businesses and they fund those organizations which have good chances of return of investment. They monitor the progress of the company, before investing in it. They also help with the mentoring part of it, so that the business grows under their guidance. Also, they remain loyal only to the point where they will need to recover their share of the money. After that, you won’t see them actively participating in your business decisions.
Business Incubators And Accelerators
Usually, it is a known fact that all start-ups take the shelter of incubators in the initial phase. Incubators help with the decision making, the financial help, investing, mentoring and more. Just like an incubator assists an infant, this is synonymous to the business. They offer several programs to which your business can be registered.
The accelerators, however, participate in the acceleration of the business more than nurturing the business. This is an important step for all business that has started off well but need boosting in their mid-journeys.
There are several contests organized by the government bodies, and sometimes private organizations. They give away lump sum amounts of money to the ones who will win. You can pitch your business idea and get as much money from them. This is a great source of small capitals bursts that you may need for expanding your business. Since these happen periodically, there is more than enough chance that you could even win more than one contests.
Yet another reliable way to pool in money, bank loans help you to collect the business capital. You will have to return the money, that remains a fact, but otherwise, this is most reliable. The bank offers the chance of both, either working capital or funding.
Money From Microfinance
Small entrepreneurs can come up to these microfinance bodies and get loans to run their businesses. This is a great opportunity for individuals to collect good funding capitals if they are interested to open their business.
Government Programs That Offer Money
This is one of the best ways to outsource the pay to your business. You will receive enough to last you quite a while. Register for contests, and raise enough money for your endeavors. The only set back may be that the money may be released with a lot of delays.
There are a few more ways to raise money, which would be product pre-sale, selling assets, using credit cards and more.