There’s nothing worse than having a great idea for a new business, crunching all the numbers to realize what you have is actually viable, and then discovering that it’s going to be more difficult to fund your new venture than you initially realized.
Because with all the will and good intentions in the world, without a hefty dose of start-up capital your business will not be able to get off the ground. So what do you do in that scenario, then? Give up? Oh no, you just have to look at alternative ways to get your cash.
If you’ve got a great idea but the banks aren’t so convinced, why not skip the middleman and go straight to the people? Crowdfunding is a way to raise funds from people who are interested in your idea. You’re not just given the money, however, there are few rules you should follow.
For instance, you can give away rewards or equity in return for money. If it rewards, then what that means specifically will depend on your type of business. Generally, it is tiered, with higher rewards getting more exclusive rewards and entry level donors receiving something like a thank you note (though try and dress it up a little).
Your Own Assets
Of course, before looking to outside sources you might want to check that you can’t actually fund it yourself. You’ve probably already checked that you don’t have the cash to hand to self-fund, but what about other options?
Many people are worth more than they think they are, it’s just their assets are tied up in other things. Sell your inherited house or your car and you would be well on your way to getting your business off the ground. It’s about taking a look at the things that you could sell in order to get your project underway.
Friends and Family
What with plenty of things to be taken care of, your venture will most likely become a friends and family operation one day anyway. So why not see if they want to get involved from a financial point of view, too? Like with crowdfunding, you wouldn’t just be receiving the money: they would get something in return (and not just your good will!).
If it was a loan, it’ll be on more favorable terms than you would get at the bank anyway. It can get a bit complicated when you start to mix personal relationships with business finances, however, so make sure everyone is on the same page before anything is handed over.
There’s a lot of money floating around the world, and there’s a lot of people who want to spend it on the next big thing. Take a look at finding a private investor who will give you a lump sum of cash in return for a stake in your company.
If you’ve got a really great idea, this could be your best option – and they might even be able to bring some of their expertise to the table, should you wish.