Startups need one or another kind of funding. Startups are some new innovative approaches or ideas of the business. However, most of the time, people think that it is hard to get funding due to some common myths. For example, people believe that there are two to three ways to get financing, but it is not valid. Even the process is not that complex as you think. If you are looking for various startup financing options, here I am sharing with you 7 ways to fund your startup.
7 Financing Options For Your Startup
Starting with startup financing might be a tricky point, to begin with, but it helps you a lot later. So beat all the odds and get what you want.
1. Personal saving:
Bootstrapping is nothing but a way to get funds by yourself. Here you can go for your savings with form 401(k). With this form, you can get your paycheck in your investment account. In this way, you can keep your feet on both boats until you get outside funding.
2. Credit Cards:
Another way is to use the credit card for initial equipment and setup. In this way, you can get some time plus avoid interest. The credit card repayment period is generally of 30-days. However, the period can vary. Even you can convert your credit into a loan with extended payment terms to avoid cash crunches.
Crowdfunding is an online campaign where people give money to the company. You can find various platforms like Kickstarter that help you to raise funds for different projects. Another type of crowdfunding is equity crowdfunding, in which the startup owner gives some portion of a company to the investor. It is a low-risk way to get a fund, but in case if it fails, it costs both your money and time.
A small startup business idea can cover-up by either a personal or business loan. To get the approval, you need a high credit score or collateral in return. The Small Business Association is a great option to consider for a startup loan. However, even you can check for microloans as they are unsecured. The downside of loans is high interest rates in some cases and a negative impact on other ways to raise funds.
An investor invests money in your business idea. In most startups, you can find an angel investor who provides funds from their personal or company’s account. To get an angel investor, you have first to create a business plan with future scope. Then, pitch it and show how potential it is for investors.
Government and non-government grants offer immediate cash for your startup business. They are not prepaid but, yes, highly competitive. It is available to help small businesses. For this, you need proper research. Do some homework and find out whether you are eligible for grants or not.
7. Venture Capital:
Venture capital is private equity that offers finance at an early stage for startups and companies. Mostly it comes from well-known investors or companies who usually invest in various startup ideas. It asks for equity, but with this funding, one can be reached to a wider market.
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So if you are ready to share your earning, you can go to the venture capital fund company and pitch your business. Make sure you make a clear business plan before approaching them.
So all these are ways to get your funding in one way or another. Which one do you find feasible? Go for it and dive deep, do research, and get the funds for your business—best of luck.