How do I find the money to fund my startup? That’s what most budding entrepreneurs ask. And, they aren’t mistaken because to be honest finding money for a startup can be very difficult. This article reviews 5 of the most reliable ways to fund a startup.
Well, there is no magic when it comes to getting funds for a startup. In fact, contrary to popular myth, no one is waiting out there to hand you $100,000 to fund your startup just because the idea looks exciting.
On the contrary, there are several creative ways of getting such funds. If you’re a budding entrepreneur, I would encourage you to consider one or two of these options and determine the option that best suits your needs.
- Negotiate an advance from a partner or customer
Find a customer that is interested in the project or a complementary business that shares your vision and ask them to give you startup business cash advance on royalty payments. You may consider white-labeling or early licensing.
- Join an incubator or accelerator program
Organizations such as Y Combinator were created just for these sorts of things – to help startups. They are associated with major communities, learning institutions, and even companies. You’re likely to get free resources including consulting services and office facilities.
- Seek venture capital and/or angel investors
The main difference between the two is that capital investors use institutional money while angel investors use their own money. But basically, they both exist to fund startups. Both options are viable if you have a qualified startup with a proven business model, ready to fly.
- Seek a bank loan or a credit-card line of credit
Basically, you’ll need a very good credit rating in order to get such loans but who says it can’t happen? Consult the Small Business Administration (SBA) to find out what kinds of loans or credit-card lines of credit you have access to.
- Fund the startup on your own
With the cost of starting business at an all-time low, you can also fund your startup on your own (also called bootstrapping). Although it may take a bit longer, the advantage is that you retain 100% of the equity.
As you can see, you always have plenty of options.