Driving a startup forwards requires more than just hard work. Taking your business to the next level usually involves funding. Funding can be a daunting experience, so to help we’ve put together a list of 5 proven ways to get a startup funded and get your product/service into the marketplace.
With interest rates at a record low, your cash in the bank won’t be doing much work for you. Why not use it? The great benefit of using your personal finance is that you don’t need to get into debt or consider giving away equity. Always keep a reserve.
Friends or Family
Receiving a cash injection from friends and family is a popular method of financing a startup. There is an obvious downside to this option thought, putting your personal relationships at risk. If you do decide upon this method, consider structuring a clear agreement that is appealing for both parties.
Banks are tighter than ever, so if your credit score isn’t up to scratch, this route might not be realistic. Before you apply for a business loan you should produce a sound business plan, create a accurate financial forecast and have some personal finance to back things up. There are several companies that support small businesses with this method and help by matching small businesses to suitable lenders.
Small business grants are indeed a thing, some are even government backed. The hardest part of this method of funding is finding one that’s right for you, and then completing the often difficult application.
Angel investors specialise in supporting and investing in startups. This method of funding is often seen as one of the most challenging options to achieve but the most rewarding, as it often come with some business support, help with decision making and an experienced head. If you decide to raise money from angels you must keep in mind that they will want to own a piece of the business for the short or long term. Typically though, agreements are made between small business owners and investors that will see a buy out option along the way.