Smart Strategies You Can Use to Obtain Funding for a Startup

Smart Strategies You Can Use to Obtain Funding for a Startup

I am sure many of you will agree with me when I say that finding investment for a startup is a very tricky and difficult endeavor.
Or, is it?
Well, if your idea is brilliant enough and you can be able to show investors how they are going to reap outsized returns by investing in your startup; you can get any amount of funding you want.
In this blog, I am going to discuss four smart ways of getting the investment you need for your startup company.
Look, there are many entrepreneurs who have very incredible business ideas but due to the inability to secure proper funding, they haven’t been able to take them very far. The businesses or ideas remain stagnant because for you to start a business and to make it succeed, you need money.

  1. How do you get the funding that will make your startup succeed?

There are several vehicles that you can use to secure investment for your startup company. But before you decide on which way to go, you need to carefully analyze your business, considering its immediate and future goals. Then do your due diligence and explore all the funding opportunities that you are considering to pick the one that is best suited to make your startup realize all its goals.
Always keep in mind that when making financial decisions, a single wrong move can lead to the collapse of your business.
The good news is with the methods discussed below; you can be able to secure all the investment funds you need to get going.

  1. 1. Finding the right investors

To attract investors to your startup, you need to first come up with a very good business plan. The business plan should clearly show your target market, the purpose of the business, its objectives, and the projected sales revenue for the next five years at least. It should also have industry reposts that clearly specify how your idea will fulfill a need that isn’t being fulfilled.
Investors want you to convince them why they should invest in your startup and not other startups that you are competing for the same market with. They want you to show that unique value preposition that makes your business different and better than your competition.
If you have an invention or an innovative idea, you are more likely to convince the investors to invest in your startup. But how many startups come up with an invention? Very few. Therefore, if the business you are starting is similar to what other people are doing, it will be very important for you to clearly explain to investors why the product you are offering is better and unique to others. It could be the price, the efficiency, unique features added, etc.

  1. 2. Applying for loans

Loans for startup companies can come in a variety of ways and from a wide range of financiers. So, you need to trend very carefully here. Take you time to analyze all the loans that are available for your startup business before you settle on the one that you think is best for you.
You can go for microloans, which are small loans given by online lenders, peer lending groups, community sources, among others. The amount, interest rate, terms, and eligibility of loans advanced to startups vary from one lender to another.
For entrepreneurs who have equity on the homes they reside in, they have the option of taking a home equity loan to advance their business dreams. However, this is a very risky way of obtaining a loan because it will put your primary place of residence at risk. I wouldn’t advise you to go for this unless your business is showing strong promise of growing beyond any expectations. But isn’t it obvious that to succeed you must take some risk and the higher the risk the higher the returns?
The amount you can secure from a home equity loan depends on the current market value of your home and the amount you owe on your mortgage.

  1. 3. Crowdfunding

The rise of crowdfunding websites has offered entrepreneurs a new way of getting funding for their startups. These sites enable you to get small amounts of funding from a big number of people who are interested in the product that you are offering.
There is a huge variety of crowdfunding options available, which makes it more complex for the entrepreneur. It is always good to ask a crowdfunding firm to help you choose which the best option for your startup business is.
Crowdfunding options range from equity crowdfunding, where they give you the money in exchange of shares in your company, to debt crowdfunding, where the money given to you is inform of credit.

  1. 4. Trading your assets

Take detailed inventory of all your assets. You may unearth some assets that you never knew their potential. Important assets can include savings accounts, shares, retirement accounts, equity in real estate, vehicles, among others.
You can use these assets as collateral for a loan or you can even dispose them to raise cash for your business.

  1. That’s not all…

There are unlimited ways you can use to get funding for your startup business. The most important thing is to research well, weigh all the options, and keep your mind open.

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