During the early stages of business intending entrepreneurs and entrepreneurs all sick one thing, MONEY! With money a lot can be achieved and without it your entrepreneurial dreams would remain just dreams. So that’s why we’ll be showing you various ways entrepreneurs can raise funds for their businesses with ease.
- SELF FUNDING
Many entrepreneurs fund their businesses themselves. They use savings or personal debt. Alternatively, they sell assets to generate cash (e.g., a second home, expensive smartphones or a car) for the business. Although personal savings might mean sacrificing a lot on your part as an entrepreneur it would be worth it eventually as the business starts to boom and the profits start coming in.
- FRIENDS AND FAMILY
Friends and Family can also provide funding. While this is a quick and easy way to get funds, one has to be careful in order not to give out part of your business. Unfortunately, it is not certain that the business would succeed. The loss of capital can then cause hurt feelings, ruin long term friendships and make for unpleasant family gatherings. Be sure that your investors know the true risks.
- ANGEL INVESTORS
These people are typically affluent individuals willing to invest in businesses. Increasingly, angel investors are forming investment groups to spread risk, and to pool research. Angel investors could be family and friends, you could meet them at social/religious organizations, social network groups, seminars and workshops.
Taking on a partner can be a source of funding. The partner doesn’t necessarily have to become an employee of the business. Strategic partners can benefit the business by providing financial resources. It is the coming together of two individuals or organizations with the same interest to put their resources together to achieve a specific goal.
- VENTURE CAPITAL
These firms provide early-stage funding, but are typically looking to make relatively large investments and take a significant share of the company, often a controlling interest. Examples include Venture Platforms, Green House capital, SPARK Capital, Microtraction.
The Small Business Administration has many programs, but in general, these loans require a guarantee that the loan will be repaid, to enable businesses to get loans from traditional lenders.