You have a great idea for a tech startup. It’s revolutionary and it can change the world.
Then reality hits. You realize that you have to fund your new venture somehow. There are a ton of possibilities when it comes to funding your tech startup.
Would you like to learn the top ways you can get startup funding for your new venture?
Read on to discover the top 8 ways you can finance your business and find out what you need to do to get funded.
1. Friends and family
There’s nothing like the support of your friends and family. They trust you and believe in you.
If you tell them that you’re starting a business and you have an amazing idea, they will more than willing to help you.
Asking people close to you for help is one of the hardest things to do. It can also be the most rewarding because you realize how much people care about your success.
2. Crowdfunding
Since you’re funding a tech startup, don’t be surprised to learn that you can fund your business online. There are sites like Kickstarter have helped founders raise millions of dollars for their ideas.
There are various crowdfunding sites that will pool the resources of individuals or investors to help you launch your business.
3. Angel investors
Angel investors are investors who are usually retired entrepreneurs or have a high-net-worth. They will invest in your company in order to get an equity stake in your business.
These investors usually get in the game at the very early stages of the business. The funding they provide is usually enough to get things off the ground. Some investors will provide one-time investments for a cash injection while others will provide ongoing financial support.
4. Bank loans
Bank loans are the most traditional way to fund your startup. You’ll want to start with a visit to your local bank branch. Since you already have an account with them, they’re going to be more likely to help you.
You’ll want to share with them what you need to finance your business and how you plan to use that startup funding for your business.
You can also get loans online for your startup. Visit this company to find out more about that.
5. Venture capitalists
Many tech startups will work with venture capitalists (VCs) because they can provide much more than small loans. VCs and VC firms have invested about $1.6 million per startup.
With that kind of cash, you’ll need to be prepared to take responsibility for it. You’ll also need to be prepared to
VCs can be tough to deal with because they expect to see a return on that investment quickly. They’re also going to take a percentage of your company. That means that you’re giving up some control of your company with the expectation of turning around a quick profit.
6. Micro grants
Micro-grants are small business grants that help small businesses get off the ground. These amounts are small. It can be a good fit if your startup expenses are low or you want to supplement other investments with a grant.
Check out your local SBA office or economic development office to see what kind of grants are available in your area.
7. Partnerships
You could enter into a strategic partnership with someone who can provide the financing for the business.
This could be a way to deflect some of the risks of funding your startup. The key is to make sure that you have the right partner to work with.
A partner means that you’re going to be splitting the responsibility of the business and splitting the profits. The decision making comes down to you and your partner, too. You both better be on the same page with the direction of the company.
Otherwise, you’re going to have major conflicts that could cause the company to implode.
8. Your own pocket
You can always resort to your own savings account if you need to finance your startup. That may be less than an ideal situation because you’re taking an enormous risk in your business.
It’s well known that most startups fail and while you’re confident you have a good idea, you don’t want to risk your future for the business.
There is a smart way to go about financing your startup yourself. That’s to do it one step at a time. You can bootstrap your startup and operate on very few resources. That will mean that you’re going t be doing everything for your business.
It can be exhausting, but it can work.
Before you fund your startup…
As you start to go forth and get startup funding, you’ll need to have a few things in place. You need to show that you have a viable idea that will be profitable.
That starts with your business plan. This is the document of all documents that show how much you know about your industry. It’s a well researched and thorough document that thinks through every opportunity and risk to your business.
It also forces you to think through your business model and show how you’re going to be financially profitable to convince them to invest in your business. Lenders and investors will expect to see that you did your homework before seeking out funding.
You need to take your business plan and put it into presentation form. That’s the pitch deck that you use to pitch investors on your idea. With your pitch deck, you need to make sure that it grabs the attention of investors from the first slide.
Creative startup funding ideas for your business
It’s an exciting time to start a business. It’s also never been easier to get your venture funded. There are plenty of ways to get funded, through traditional means like bank loans to new ways like crowdfunding.
In order to get startup funding, you have to prove that your business is worthy and able to survive the market risks. You have to prove that your idea is a profitable one.
Are you ready to learn more about launching your startup? Check out this article which gives you tips to grow your startup.
