Money is the lifeblood of every business.
For most established organizations, it sustains corporate performance and it allows more opportunities for business expansion.
For young entrepreneurs, money actualizes the birth a business. Without financing for startups, a bold idea will remain a set of lifeless words on paper.
This article aims to provide the most effective strategies to secure funding for a startup.
We will lay out how every strategy works and why it is recommended for startups so that you can choose the best option, tailor fitted to your startup. Happy reading.
While credit cards are usually utilized for cashless payments, specific types are tailor fitted to the needs of entrepreneurs.
To learn about the lineup of business credit cards available to you, visit your bank’s website and even sit down with a representative to review the best credit packages for which you qualify.
This option is best for those with an excellent credit history. A credit score above 700 is a common prerequisite banks look for when they approve loans and other credit products.
If your credit history is a little rough around the edges, a debt consolidation service might be able to help fix the problem for you.
You can choose from a variety of programs, depending on the type of debt you want to refinance.
What sets credit cards apart from other strategies is the amount of control that it gives the entrepreneur.
With credit cards, you won’t have to share ownership with an investor or adjust company policies based on investor preferences.
So if you want to be the boss of your business, apply for a business credit card as early as possible.
Venture Capitalists are groups of people who shell out resources for innovative startups.
Apart from the financing that a business may receive, VC’s also provide mentorship, business consulting and working with a financial advisor by Raymond James.
To be successful in getting them to finance your startup, the business’ operations should show a strong pattern of growth.
This means that the startup should have a competent team behind it, with a long-term plan, and a proven concept.
Angel investors are similar to venture capitalists in that they support fledgling businesses. Although there are two major differences from VC Firms.
First, angel investors have less extensive operations. Sometimes only one person funds the business.
Secondly, this option usually requires a greater portion of a company’s equity. While this may be threatening to a young company, the additional capital can mean faster growth and more business opportunities.
The term itself gives you an idea of how crowdfunding works. Crowdfunding allows startups to acquire equity-free funding from various people and institutions who believe in your concept.
Websites such as Kickstarter will help you create a campaign with the goal of convincing people to support your cause.
It’s just like presenting a business plan to group of panelists, except that in crowdfunding, the whole world is your audience.
To succeed in earning money through this method, you’ll need to offer a product or service at an introductory price.
Crowdfunding allows for early-adopters to purchase your startup’s concept at a discounted rate, which helps fund early-stage manufacturing and development costs.
Scientists and institutions receive money to conduct research or to create prototypes of possible inventions from governments and organizations.
Startups also have access to specialized Grants and certain low-risk credit options. The beauty of a grant is that a grant doesn’t need to be repaid.
They are a form of help that the government gives in exchange for an organization pursuing a goal or agenda that’s in the public’s interest.
To be successful in applying for a government grant, your organization will need a cause that is in line with the interests of the government so that you can access this cheap capital to start your own business.
These causes include environmental preservation, research and development, and gender equality. So if these goals are envisioned by your business idea, a grant is simply a click away.
After reviewing all of the various grants currently offered by your local, state and federal government, it’s important to understand that larger grants are incredibly competitive.
It may make sense to apply for smaller grants that might not have as much competition. The good news is that a small business can find grants solely on the basis that their future company will create jobs in the local economy.
Separate from cause-based grants, economic grants are a great way to gain access to affordable start-up funds that can partner with your existing capital to launch your business into the stratosphere.
So there you have it.
Those are five of the best sources of start-up financing that can help you transform your raw idea into a business success.
Just remember to consider cleaning up your personal credit history by consolidating debts before applying for a ton of outside financing.
Good luck, and may the odds be ever in your favor.