D for Democratization: Why Every Start-up Can Get Funding in 2018
Failure. We are all afraid of failure of our endeavours. Business endeavours are not an exception. Did you know that building a small business was ranked second among the scariest life-changing events?
A multitude of start-up ideas are born and die even before somebody recognizes them. Why does it happen? The most obvious reason for that is the fear that arises from lack of money in the purse of a budding entrepreneur. “I don’t have enough savings, so I can’t set up a company”, “I don’t know how to find investors for my start-up, so I’d better give it up” — two common thoughts of a failed business owners who didn’t even try.
But it’s time to put your fear aside: start-up funding becomes accessible for almost everyone. The market is saturated with companies and individuals wishing to invest in innovative start-ups. The funding options are no more limited to bootstrapping, friends and family investments, and business loans. The number of opportunities to get start-up financing grows exponentially, and we call this process a democratization of funding.
In fact, the world is on the cusp of the democratization of everything. Forbes contributor Michael Wolf highlights democratized funding as the third pillar of democratized business. Let’s see exactly how it manifests in popular funding options and why every start-up can get funding in 2018 more likely than ever.
Angel Investors
Angel investors are wealthy individuals who succeeded in their own business and are ready to share their capital, experience, and contacts with start-ups. They are hunting for high ROI small businesses, so they are motivated to help you grow. Angels prefer funding more start-ups for less money and usually invest between $10k and $100k in each venture. Portfolio diversification is essential in this case — not all businesses will rise.
Although the concept of angel investing is not new, now it is clearly booming. Investments received from angel investors are about to outgrow VC, despite much smaller money supplies. The total amount of invested funds by angels comprises $20BB, VC — $22BB per year. The chance to get funding from angels is relatively high — they accept 3 out of 10 considered deals.
Where to find an angel investor? In the past, you could meet them only at specific events (such as Investment Symposium, ACA summit, etc), but now you have the whole web at your fingertips. The easiest and the most effective way to connect with a prospective investor is to join an online fundraising platform. For example, Angel Investment Network is one of the services which help business owners and investors find one another.
Crowdfunding
Disappointed with traditional funding approaches, start-ups more frequently turn to crowdfunding. This fundraising activity involves a large number of investors who contribute small amounts of money to chosen start-ups.
Crowdfunding grows in popularity year by year: in 2017 it grew by 167%. The success rate of all crowdfunded businesses reached 37.2%, according to Kickstarter statistics. Fundable reports that this way to fund a start-up is the most fast-growing and accessible among others. Anybody can come forward with their idea and ask for funding. Those who find this idea promising might invest in this project.
How to get money to start a new business through crowdfunding? Sign up to the crowdfunding platform like above-mentioned Fundable or Kickstarter, craft your story, back it up with relevant numbers and spread your word over the world.
Start-up Incubators
Start-up incubators are the best options for you if your idea is still in the bud. Those services not only help you in fundraising, they fully support you in the early stages of your business development. If you’ve ever heard about Airbnb (we bet you have and probably even used it once), here’s the fascinating fact: this company came from an incubator. Enterprise owners received $20k funding from Y Combinator along with $30k made on selling cereal boxes. This was their first stepping stone on the ladder to fame.
The huge success of Airbnb is not surprising. Statistics say that companies nurtured in the business incubator have 87% of survival rate (unassisted enterprises — only 44%). Of course, there is no guarantee that an incubator or accelerator will accept your product, but it’s definitely worth a shot.
ICO Funding
When in 1848 we had the California Gold Rush, now in 2018 we witness the Global Crypto Rush. And it heavily affected small business funding processes. Tons of start-ups attempt to get money by issuing their own tokens. According to Bloomberg, ICOs yield incredible results: $3.8B was raised in 2017, and this number beats VC funding (one more evidence the future of VC is not VC, but that’s another story).
Fundraising through ICO revs, so the emergence of the platforms which help owners to build their ventures with blockchain is inevitable. Metamorph is among them.
Our service combines the best features of business incubators and a crowd/VC funding. Making funding available for everyone is our primary mission. We bring it to life by connecting founders to our blockchain ecosystem with an access to capital, tools, and expertise of our growth-hackers.
Frankly, there is no one-size-fits-all way to get funding for a start-up. How can it be, if each newborn business has its unique background, goals, and opportunities? Particularly at a time, when entrepreneurship is at its peak and the number of funding options is through the roof.
The final decision is always up to you. Whatever, you heard the operative word — funding is possible. The time for action is now.
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