Money… How to Find Some For Your Startup
Money It’s a concern that most people, entrepreneur or not, face on the daily. Can I pay my bills? Am I spending too much? These are all questions that plague us all. However, for business owners money is not only a personal concern, but it also affects their entire company. They need to worry not only about how to pay themselves, but also pay anyone who works for them. A late payment from a customer means that they will possibly have difficulty paying rent or salaries. This can be a HUGE source of stress for most entrepreneurs, and while financial uncertainty sadly comes with the territory of starting your own business there are many resources you can use when trying to fund your enterprise. People talk about investors like they’re everywhere, and everyone seems to know who to talk to in order to find investment. However, we all know that while we wish finding funding for startups were like this:

It really feels a bit more like this:

Don’t worry! We’ve all felt that struggle. Uber got rejected by Ashton Kutcher and Airbnb was rejected multiple times before getting investments. Until we hit it big and become the next Facebook, we all have to make ends meet especially when starting up. Here are some sources of funding that you can use to help you start of scale your business.
- Competitions and Grants- These are a great way to get funds without any risk. While applying can be tedious and convincing judges to pick you can be difficult, once you’ve won the prize the money is yours. While these are not a steady source of income, they’re a good way to get a bit of extra cash to push your company forward. The best part is that you don’t have to repay the money; it’s yours to keep.
- Small Loans- Small loans are another way to gain the money that you initially need to start your company. You have to keep in mind that you do have to pay this back and usually with interest. There is a risk inherent to taking out a loan because if you don’t make the money to repay your loan you could have some financial difficulties. While loans will get you out of a bind, you should always be sure that you can pay the money back within a reasonable time period.
- Family, Friends, and Fools- These are the three people who will buy your product. You can leverage your network, which are your friends and your family to be the initial users of your product. The fools are those who don’t know you and you still convince to use your product. Once you get enough people to use your product, this is the best money stream you can have. The difficulty is getting people to first purchase your product and then to make the purchases steady.
- Incubators- Incubators can offer funding as well as support. However, do keep in mind that they request equity at time or charge fees for their services. You must be sure that the support they’re providing and the money they’re giving is worth losing a portion of your company. If you want to read more about possible issues with incubators check out this article.
- Crowdfunding- This is another good boost, but it’s not a steady funding option. Crowdfunding is usually very much driven by yourself and your network. It requires a lot of time commitment and marketing on your part to meet the goals you set for yourself. You can’t rely on this platform to fund your project forever. It’s a good boost to help you develop the first round of your product, but it shouldn’t be your main source of revenue.
- Angel Investors- These are individual investors who love your product and want to invest in your company. While they can usually fund sizable amounts of money, they can be hard to come across.
- Accelerators — Like incubators they can also provide funding in exchange for equity. They tend to target more developed projects than those that incubators help. Not sure what the difference is between this and an incubator? Don’t worry we’ve all been there. Here’s a pretty good resource.
- Public Funding- The government or NGOs can sometimes offer funding to help your project if you provide a service or product that is good for the community. A quick internet search will let you know of any public institutions or NGOs that give out funds to support businesses in your sector or in your area.
- Venture Capital- This is a type of financing that is given by firms or funds to startups that seem to have the potential for high growth or have shown high growth. These funds tend to give in larger amount, but attracting a Venture Capital firm can be difficult.
No matter which direction you choose you should always weigh your options carefully. Each funding option has its positives and its negatives. The most important part is finding which is the best fit for you. Most people use a mix of various funding techniques. They apply to grants, while seeing Venture Capitalists and Angel Investors, or take out a Small Loan until they receive funding through their accelerator. The most important part is if you have to repay the funds you have to be sure that you can do so within the necessary period of time. Funding decisions are tricky ones with which entrepreneurs are faced, and it’s best to be aware of all possibilities before making a decision.

Trying to plan out the financials of your business? Confused on how to start? We’re here to help! Check out Bridge for Billions to get some help structuring and understanding your business.


