Financial Foundations – Securing Funds For Your Startup

Posted on Jul 24 2017 - 6:55pm by Editorial Staff

Having a good idea is only the first step to starting your own business; the second is finding a way to finance it. Most can turn to business loans or credit cards to help them get their initial startup off the ground, but those with more precarious financial position might not have these options available to them. Since you plan on making a living out of your new startup, securing finances is one of the things you must get right when you get started.

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Savings

Sometimes it’s best to work on your business part time while you stay at your day job to help pay your bills and put more money in a savings account. Some also sell assets to generate more cash for their business. The great thing about using your own money to start up is you don’t have to go cap in hand to anyone else. Plus, there’s the added bonus of not starting out in debt, or giving away equity at an early stage. There are other advantages too – if you want to pump more cash into the business later on, investors often like to see you’re committed to a venture enough to put your own financial weight behind it. On the other hand, it does put more pressure on you to succeed because you could lose everything if your business fails.

Investors

If you have an idea that you feel has a lot of potential, then someone else might believe it’s a worthwhile investment. In the past, you might have had to pitch your idea to the appropriate businesses, and now you also have the option of finding mobile app venture capital if your business idea plays a role in the mobile internet, or big data industries, but now anyone can reach out to Angel Investors regardless of your target market. A business angel can be an acquaintance, a former employer or someone you’ve found through a funding network. There’s no hard rule other than that this kind of funding involves an individual or group that offer cash in exchange for a share of the business. Sometimes they take an active role in the venture and sometimes they act as silent partners.

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Cloud funding

You can find many things online, and now this includes funds for your business. There are a number of groups that will allow you to pitch your ideas to investors via the internet. Typically, when this type of funding is successful, multiple investors will contribute funds to the idea.

Crowdfunding

Perhaps established businesses aren’t interested in your product, but that doesn’t mean the general public won’t see its potential. Donors or investors on crowdfunding sites, such as Kickstarter or Crowdcube are typically private individuals providing small sums, so they’re unlikely to give you the sort of grilling, and rigorous conditions, an angel investor would. You can also use this as research to see whether your idea is as popular as you believe, and see which market shows the most interest.

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Editorial Staff

Editorial Staff at I2Mag is a team of subject experts led by Karan Chopra.