Money follows passion, not the other way around.
You have a business idea you love, but no idea how much money you need to raise, where to find the funds or how to even prepare do the asking.
Here are some tips:
- Fund your startup yourself. These days, the costs to start a business are at an all-time low, and more than 90 percent of startups are self-funded. It may take a bit longer to save the money before you start and grow organically, but the advantage is that you don’t have to give up any equity or control. Your business is yours alone.
- Pitch your needs to friends and family. As a general rule, professional investors will expect that you already have commitments from family and friends to show your credibility. If your friends and family don’t believe in you, don’t expect outsiders to jump in. This is typically the primary source of nonpersonal funds for very early stage startups.
- Seek a bank loan or line of credit. In general, this won’t happen for a new startup unless you have a good credit history or existing assets that you are willing to put as a collateral.
- Join a startup incubator or accelerator. These organizations are very popular these days and are often associated with major universities, community development organizations and even large companies. Most provide free resources to startups, including office facilities and consulting, and some provide seed funding.
- Trade equity or services for startup help. This is most often called bartering your skills or something you have for something you need.
- Negotiate an advance from a strategic partner or customer. Find a major customer, or a complementary business, who sees such value in your idea that they are willing to give you an advance on royalty payments to complete your development.
- Solicit venture capital investors. These are professional investors who invest institutional money in qualified startups, usually with a proven business model that’s ready to scale. They typically look for big opportunities, needing a couple of million dollars or more, with a proven team.
- Apply to local or international angel investor groups. Most countries have groups of local high-net-worth individuals interested in supporting startups and willing to invest in qualified startups.