5 ways to finance your start-up venture
Do you have a great business idea that you want to put into action? Is the lack of funds stopping you from achieving your dream? Here are some winning tips to help start your venture.
1. Consider bootstrapping - Using personal finances or bootstrapping is a great way for an entrepreneur to start his business. Capital can be raised from savings accounts, credit cards and retirement accounts. One can also raise equity by selling properties, rare collectibles, vehicles, etc.
2. Be realistic about your investment - Rather than taking the maximum, ask for a loan that will meet one aspect of your business. For instance, if you need money for your inventory, assess the cost and ask for a minimum amount. Once you repay the initial amount, the investor also gets confidence in you. Ensure that you show your progress at every step.
3. Borrowing money from friends and family members - It can be challenging to get loans from banks or private lenders. Instead, turn to your friends and family. Don't just look up to your father or best friend, but also shortlist those people who believe in your project, understand your plan and are aware of the risks involved. Ensure that it's a loan and not an equity investment as you do not want too many friends and family members to own a stake in your company. An added advantage is that private loans have low-interest rates compared to those given by banks. Also, put every transaction in writing to avoid any legal issues later.
4. Crowdfunding as an option- It is a group of people who network and pool in their money and resources online to support start-ups. When approaching the investors, have a strategy in mind and keep it simple. Be ready with answers like how do you plan to spend your money? What are your short and long-term goals? Do you have a copyright in place? etc. If you want to set up