How to Get Funding for a New Business
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Even if you have the best business idea in the world you will need the financial-backing in order to kick start your idea into reality. In reality, funding should only be a small setback for you as you start your new business.
Previously, we have written a lot on how to found a startup. Below, we will break down how to get funding for a new business.
1. Scrap Together the Spare Money You Have
Before you start thinking about panhandling or reverting to desperate measures to secure capital for your business, remember that you have opportunities sitting right in front of you! Think back to all the money you have saved up. Maybe you have savings accounts that you forgot about, cryptocurrency sitting in a digital wallet, change jars, and so on.
You need to keep in mind that there is no such thing as starting a business without any sort of risk. Be ready to take a ginormous financial risk in order to fund your new business.
2. Start Saving Money by Cutting Expenses
This is a great idea for those who would prefer to go through all the steps necessary to finance their business on their own. Especially if you are willing to wait a year or so before you open your new business. A great way to secure capital for your business is by taking some time to save it up yourself!
There are lots of theories and strategies regarding what the best way to save money is. Most of these ideas all collide and agree on one thing: cut back on wasteful spending! If you can save anywhere between 25 to 50% of your monthly income by cutting back expenses you will quickly find yourself with a lot of extra investment money sitting around.
Crowdfunding is probably the easiest and most stress-free way to get investment capital for your business. In fact, there are various companies that became massively successful after crowdfunding. Here are some of the best platforms for you to start your search on:
Although crowdfunding is relatively easy to do, the results aren’t always as easy to predict. Depending on how much effort you put into your crowdfunding post, the exact details of your business plan, and your marketing skills as a whole.
If you decide to try crowdfunding out, be vulnerable and put yourself out there. There is no shame in trying. However, be ready for small failures to happen. If you don’t quite get the results you want, there are still other options to look at!
4. Venture Capital Firms
Venture capital firms (or VC firms) are one of the most traditional ways to get funding for your business. If you can find a deal which works well for you and the firm, this will instantly kick start your business. Keep in mind, though, that the price of receiving an abundance of capital will be a sizable share of your business.
Usually, VC firms will give you money to use for your business. In return, they won’t necessarily ask you to pay them back. However, you will give up partial ownership of your business.
5. Angel Investors
Have you tried asking many different venture capital firms for financial help only to get turned down over and over? If so, then angel investors are probably the next best option to consider. When venture capital firms are routinely rejecting to give you financial assistance, you can get a little more creative.
Don’t worry, even after countless rejections and failures you still have options to consider. Another one of the best options for you to look at is an angel investor. Angel investors are private individuals who finance those who are rejected by just about any other popular option. If you have tried crowdfunding, bank loans, savings, and so on, then this is the next best option for you.
Just like VC firms, angel investors typically will ask for partial ownership of your business in order to incentive themselves to invest in your business.
Ready to Start Your Business?
Once you have learned how to get funding for a new business, access your investment funds, and are ready to start taking your business seriously, the next step is getting a business bank account.
Penta is a banking service specifically designed for small startup owners. We provide rewards and benefits programs to help startup owners access enough funding for their business expenses. We help startups succeed! Be sure to check out our Free Online Business Account and you can even have your new account up by tomorrow!