Discover the 6 effective options to raise money to start your business

by Suraj Mahato Web Designer

The acquisition of financial funds to help you build your home as a business owner or entrepreneur is a huge challenge, especially if you do not know where to begin. Trusting your startup platform and following the wrong path will keep you away from raising the necessary funds, and attracting other factors of production.

There are several options to ensure the capital of your company, such as players in markets, crowdfunding , angel investors. Nowadays it is easier to raise funds than before. Here are seven ways you can raise funds for the startup and expansion of your startup :

1. Finance your own idea

This way of raising funds is the most common among the initial stages of the startup. The founders or team members pool their money for its implementation. Professional investors in the market prefer this way of raising funds.

You must have some savings or assets that would be used for the start of the business. Financing your own startup is a way to tell potential investors, how serious you are and how confident you are about your company. Putting your money in the project shows that you are willing to take the risk of putting at risk the money for which you have worked hard, supporting your idea with the faith you have in your company.

Injecting your own capital into the business has advantages that other ways of raising funds do not have, excluding crowdfunding. If you self-finance in your business, you will have control over it in the premium stages as well as collective financing. Otherwise, you will have to give capital shares or contract debts, which will have an impact on your baseline.

2. Crowdfunding

There are several types of collective financing . You must select which is the best for your company, as rewards or based on actions. It is an excellent way to raise funds for new companies with artistic projects or even to raise capital to finance the manufacture of new technologies on a large scale.
Any option that you choose this option is low risk as if you wanted to put the product on the market and also obtain funds to finance your product and make it a reality. This is also advantageous to get comments from the first users of your prototypes.

The future investors will be able to see the adoption of the market if you go with the collective financing, this will help you in different ways. When investors notice that other people are investing willingly in your idea, this will persuade them to also invest money in it.

3. Investor angels

The angel investors are quite popular due to American program ABC Shark Tank . In the business world, it has been prominent for new companies, as they not only provide financing to set up their business, but also experienced mentors and guidelines. In general, Angel investors inject about one million dollars.

Reaching these investors is as easy as reaching the right people, but only if it is done in the right way. Some examples are participation in social networks, LinkedIn groups and blog posts on websites, etc. As you reach more people and hear your idea, they will give you comments and more reviews that will help you with your product. The more people know, the more they will be interested in investing and it will be an advantage for you.

Finding angel investments may be a good option, but it is not for everyone, since these capitalist partners usually want a significant return on investment and may also want more control over the management of your business than you would like. . If you choose to look for angel investors, try to find someone who is on the same line as you or who has been successful in that industry. Concentrate on those investors who have experience in your target market or a point of view that your team lacks. Investors want you to be successful and they are also a valuable source of guidance and experienced guides

4. Friends and family

One of the best places to raise funds is from your own home. As your family is aware of your talents, they will be willing to support you regardless of what you want to do. Family and friends are the only ones who know your potential and will be willing to give you money to start your business. This may seem like a great way to earn investment partners, but everything has its drawbacks. The acquisition of loans or investments from family or friends can be advantageous for some companies, because they have faith in your skills and your success. But for others who require assistance or expert guidelines, angel investors are the best way, since your family might not have the experiences that are necessary.

This can be a good way to raise money because they love you and care for you, but it's not fun when you lose it, because it can affect your relationship with that person forever. A good way to raise funds from your family can be if you choose those who have knowledge of the business and its risks while investing.

5. Take a loan

Another way to obtain financing for your start is through a commercial loan from the bank. It is a way to maintain the initial control of the business in your own hands. Asking for a loan for new companies can be healthy, but only for those who have full confidence that the business will thrive in the first execution without difficulties. Again, it's up to you and the type of business you want to incorporate.

6. Participate in competitions

To get publicity, you can participate in competitions if you think your idea is capable enough. Participating in these contests will be very useful for you, because if you win the competition you will get a source of financing and, on the other hand, you will get publicity for your product and people will wait for it to reach the market (acts as advertising).

This is a low risk option, since you expose your ideas to investors and, if it is good, you can win the competition and get cash rewards to finance the start-up of your business to be successful. If you do not win the prize in cash, participating in a competition serves to give you publicity.

There are several ways to raise funds for your new company. All you need to do is choose one that is best for you and your business model. Start with all the options that are beneficial for you and your business, then slowly reduce those that best focus on achieving your goals. Also, keep in mind that the fact that obtaining funds can be a long process and may not be successful at first. Evaluate your progress at each level, keep your mind open and follow the advice.