6 Realistic Ways of Getting Funding for Your Startup

Getting adequate funding for a startup is the sticking point for many budding entrepreneurs with brilliant business ideas. While nobody is waiting to blindly invest in any random business idea just because it sounds innovative and excellent, there are several viable options for getting funding for your creative startup. Here are six realistic, smart ways of obtaining financing for your growing business.

1. Contributions from Close Friends and Family

One of the simplest strategies of getting funding for your business idea is speaking to your closest friends and family members. In fact, friends and family members who are familiar with your ingenuity in coming up with innovative ideas will be much easier to convince than established banks and investors. They’re more likely to fund your small business because they believe in your dream.

However, if you’re taking their money as a loan, you should consider seeking sound legal advice from credible lawyers to avoid unforeseen conflicts down the road. Furthermore, borrowing money from friends and family can be tricky because if you don’t pay them back or show enough appreciation, you may end up losing your best friends and souring happy family relationships.

2. Taking Small Business Loans

Most banks, regardless of their sizes, are often very skeptical about lending money to startups and small businesses. Although this is the unfortunate reality on the ground, there are still several established banks out there who might be willing to listen to your business idea and help you get the startup off the ground.

However, some lenders are predatory and can cripple your dreams and business ambitions. But some like the Guyana Bank for Trade and Industry Ltd., also known as GBTI Bank, offers lending and investment support services to small businesses with no ill intents. Since it was established in 1836, the bank has grown into a reputable financial institution in Guyana by helping both businesses and individuals reach financial freedom.

3. Crowdfunding

Crowdfunding is a credible online resource that can also help you raise capital to launch your business. There are several sites that you could consider to get crowdfunding, such as Kickstarter, Fundable, and CrowdFunder.

Most of the credible crowdfunding sites online function in more or less the same way. However, some platforms allow entrepreneurs to raise capital from anyone, while others give you access to a pool of established, professional investors from different parts of the world.

If you promote your startup and ideas on such platforms convincingly, you can end up getting sufficient funds to launch and run your business for years. For example, when Oculus Rift, a virtual reality headsets brand, started promoting its business idea on Kickstarter, the aim was to raise $250,000: they ended up getting more than $2.4 million.

4. Trading Services or Equity

Another realistic strategy is bartering with another business owner online or even offline. For instance, if you find a freelance website designer in your city, contact him/her, and agree on how to exchange your digital marketing knowledge for his/her web design skills.

This way, you’ll get affordable or free web design services to help boost your small business’s online visibility. Moreover, a majority of fledgling businesses in most cities are always willing to work together if the partnership is mutually beneficial to both parties.

5. Bootstrapping

It’s also possible to start your business by utilizing your own funds. In investment circles, this approach is referred to as “Bootstrapping.” The money that you’ll spend on funding your business can come from lines of credit that you have on your property, mortgages, personal savings, and low-interest credit cards.

It’s crucial to evaluate your financial status through a free credit report card. Knowing where you stand financially will come in handy in helping you understand the type of interest rates you can get on loans so you can make informed financial decisions.

6. Local Contests

Unless your startup idea is incredibly invigorating, trying to access popular competitions such as Shark Tank, is a waste of resources and valuable time. Thankfully, though, many local SBAs and COCs have embraced the idea of running local contests that are similar to the Shark Tank. These local contests are less competitive and tend to have more lenient entry requirements because they are locally focused.

In addition, getting used to participating in these local contests will expose you to better ways of pitching to potential investors. Furthermore, even if your business won’t succeed in getting picked or accessing sufficient funding, you’ll get a rare opportunity to spread awareness about your startup.

The only downside is that you may end up wasting a lot of time in coming up with ingenious presentation tactics, rather than focusing on fine-tuning your business idea. Therefore, if you notice that most of the potential investors who attend these local contests don’t seem to like your idea, go back to the drawing board and re-evaluate the approach.

Attracting the attention of angel investors or venture capitalists, banks, financial institutions, or lenders is relatively easier when your startup is a tech-based business idea. However, due to the ever-increasing competition in various markets, you need to be smart, tactical, consistent, and aggressive when approaching lenders or pitching your idea to potential investors.

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