No matter how exciting or interesting your business idea is, getting funds to carry out your plans can be very challenging. Finding investors is not easy since there’s no certainty that your business will be successful. However, it is still possible if you will be creative in looking for ways to fund your tech business.
Securing funds is very tough, whether you are looking for capital to increase your money or for startup funds. To help you find the financial funding that you need, here are some techniques that you can do to achieve your goal.
- Small Business Loans
Although it can be challenging to qualify for a small business loan, it is still worth a try. Some banks offer to lend money to small businesses. All you have to do is submit a loan application. Usually, banks will only allow you to acquire a loan if you have a good credit history. But they have different policies when it comes to startups or small businesses. You can also try lending companies or even equipment financing. The information available at Equify will guide you through this process.
Websites like Kickstarter and Indiegogo can help you get started with your tech business. There are already many successful businesses who acquired funding through these sites. It would even be more helpful if you are great at social media, and you have an exciting idea. Crowdfunding is a good option, but you need to find ways to generate buzz and be noticed by backers. If you didn’t stand out from the crowd, it would be hard to achieve your target amount.
- Trade Equity or Services
Also called bartering, this is a method wherein you will exchange your skills or something you have to something that you need for the business. If you need a website, you can ask a freelancer to do that for you, and you will do something in exchange for that service. It is important that you stick with your deal to make sure everything will be smooth sailing.
- Incubator or Accelerator Funding
These are usually found in places near colleges that offer business programs. But they are focused on tech-heavy businesses. The good thing about incubator funding is the mentorship you can get from experts in the field. The guidance from experienced people is just a bonus from the cash that you can acquire. Incubator programs like TechStars, Y Combinator, and 500 Startups will also help you network with others, which may result in possible business alliances in the future.
- Family and Friends
The most common way to get funds for a business is by asking for the help of family and friends. It is possible that they will believe in your dream and will support you. You can borrow money from them or ask them to be one of your investors. But you have to make sure that things are clear to them. Supply them with financial projections as to when they could get their money again. This way, you can avoid misunderstandings. Since you are just starting a business, clarify to them the risks involved.
- Angel Investor
An angel investor refers to a wealthy individual who can provide capital for your business. This is usually done in exchange for ownership equity or convertible debt. If you are planning to approach an angel, make sure that you are ready with your marketing and sales plan, competitive analysis, and market assessments. Once you already communicated with an angel investor, always update him or her with the developments of the business.
There are startup business contests wherein the winners will get funding to realize their tech ideas. Joining competitions will give you the opportunity to practice presenting the project for other investors. There’s nothing to lose if you try. Yes, you would spend time in preparing the proposals and presentations but you if won’t make it, you can use these in getting investors. Win or lose, the experience will hone you into a better business person. It is also your chance to network with like-minded individuals.
It needs lots of hard work so you can fulfill your dream of turning your ideas into a real business. Do not expect that someone will just hand you the amount you need to start your business. You have to convince them that your idea has value and your products or services will be useful to many people. Indeed, raising money for a startup is hard at the beginning, but once you get your capital and start your business, it would all be worth it.