Business is not a cup of tea for everyone; it comes with many sacrifices and turns. Every entrepreneur or business founder feels like raising money for the business to leverage it. Raising money for the company is one of the difficulties every business person faces in their business life.
Because business needs cash flow, correctly managed liquidity when you are setting up something new. Later, it might give you a lot back, but it needs cash in the initial stages or mid-stages.
From renting workspace, hiring staff, buying essentials, everything needs money, shaping your idea, and running your business.
Unless you have rich people backing your business or born with a silver spoon, then you need to think about raising funds for your business.
But many people consider that there is the only way to get funds, lending from the bank. Well, that’s away, there are some other ways too. Let’s explore them.
What is crowdfunding? This question might be ticking in your mind. It’s a way to get funding from a mass of people or organizations.
There are some pretty powerful platforms for startup aspirants or entrepreneurs to raise funds. Platforms like Kickstarter, Indiegogo, and Fundable doing a great job in the crowdfunding section.
But every fundraising platform has its pros, and cons like Indiegogo began offering fundraising campaigns without end dates while an end date is essential for business owners.
So it’s entirely based on the needs of the founder.
Business or Personal Loans
Companies like AMEX, Chase extends working capital credit to small business owners. For a brick-and-mortar business, this can be handy.
You also get a personal loan in your name but, I’d advise you to keep your personal finance and business finance separate.
Business loans are the most suitable way to go about securing funds for your business. To make the most out of it, use business loan calculators to compute your monthly payments and revise them according to your preferred budget.
Angel Investors are the most reliable way to raise funds for your next idea or business. This kind of investor is always looking for new ideas to invest funds.
Angel Investors fund many tech giants in the world like Google, Yahoo, and some others in their early days.
Angel Investors not only give funds, but they also guide, provide resources, and many other facilities.
This type of investor shows interest in a business that has great potential but needs funds for rising.
Taking money from angel investors requires giving some of your business share to the investor.
And all the business transactions must be registered with the Securities and Exchange Commission.
Venture Capitalist is very similar to Angel Investors. But they only invest money in the projects they find profitable for them.
Like Angel investors, venture capitalists also look for the shares and business percentage in return for money, but also they want to handle the voice in the direction of the company.
VCs are maybe a single person or a group of investors, but the concept of every VC is the same.
They feel growing a company in which they invested vast chunks of money needs to have some control over how the company gets managed.
Friends and Family Loans
This type of funds could be beneficial for your business.
Someone from your friends or family, seeing your success or well-maintained business, might show some interest to invest some money.
In most cases, they don’t look for many stakes, or a considerable percentage of interest if they lend you.
But it’s completely advisable to look for all the pros & cons of this type of funds for your business.
It is another best way to raise some early investment. Many contests organize where you need to pitch your startup plan and business plan, and you will win some cash.
There are many other ways also available to raise the required funds for your business. But choose according to your needs and business size.
Keep in mind that never compromise with your business plan ever for the sake of funding, if one rejects more five are here to listen to your project.