So, you have an amazing idea for a business. There’s just one obstacle: the money to launch it. Fortunately, you have many ways to secure funding for your startup if you are willing to research and take the necessary steps to convince investors, banks or regular people. Four ways of acquiring funds for your startup business include venture capital, angel funding, Small Business Administration (SBA) guaranteed loans and crowdfunding.
Take a formal approach when you try to gain funding from venture capital groups. To find venture capital opportunities, browse through websites such as National Venture Capital Association. Don’t forget to search names of local venture capitalist groups through banking professionals and community finance experts. If you do secure a meeting, remember that venture capitalists make money if you do, so your proposal should focus on your business’s growth potential.
Most angel investments go to startups or businesses in the early stages. Angel investors also prefer startups that expect to handle hundreds of employees and look for companies that will make $50 million in sales within three to seven years. Angel investors differ from venture capital groups because they use their own money to invest rather than money raised for investment capital. As with venture capital, to attain angel funding, you must submit a proposal or prepare a presentation for investors.
Small Business Administration Guaranteed Loans
The Small Business Administration is willing to help entrepreneurs secure loans. The three types of loans you can get with the SBA’s assistance are real estate/equipment loans, general loans and microloans. A real estate/equipment loan provides up to $5 million and is determined based on an estimate of how many jobs your business will create, manufacturing needs in a community and public policy efforts. General loans also offer up to $5 million. In contrast, microloans lend a maximum of $50,000.
This method of acquiring project capital is increasing in popularity. Crowdfunding involves raising money online through a crowdfunding platform. In this approach, incentives such as discounts or free merchandise are typically given to donors. Some popular crowdfunding platforms include Indiegogo, Kickstarter, Crowdfunder and Rockethub. Each site has its own guidelines, so be sure to read them before attempting to gather funding.
Additional Tips for Securing Startup Funds
Remember that investors are taking a risk on your company, so it’s only natural they expect to see a lot of detail in proposals. Take it seriously and remain diligent as you do your best to make your startup a success with the help of their money. Regularly update supporters on your progress so they feel included and happier about their choice to invest in you. Don’t give up on finding funding and making your business a success for everyone.
Sign Up With ActionCOACH to Jumpstart Your Small Business
For additional business help, including writing impactful proposals that will ensure you secure funding and achieve your goals, contact ActionCOACH Tampa Bay today.