One of the biggest hurdles for most start-ups is having enough capital to keep the business running. Starting a business is expensive; office equipment, enough resources to support taking on or landing additional clients, marketing material to get better exposure, and the list goes on. Below are some methods that may be of some help when considering start-up funding.
Self-funding – When possible, this is the ideal method to fund your business. Most importantly, it doesn’t require you to give up any control in your company.
Friends and Family – If possible, tap into your inner circle before considering speaking with an investor. If you can land a no interest loan from your uncle, then go for it. Of course there’s always the chance of your relationship becoming a bit uncomfortable.
Small Business Grant – Tough to land but always worth a shot. Securing these types of funds can often be quite intense and require a lot of effort.
Lines of Credit – Not exactly easy to achieve for a young company but give it a shot. One thing to keep in mind is that Commercial banks are often reluctant to lend to start-ups unless personal collateral is at risk. I personally wouldn’t recommend putting your house on the line, but it’s always an option.
Angel Investors – Angel networks can come in handy for the right type of company. Most importantly, find angels who have a good understanding of the industry that you’re in and make sure that you do a good job of displaying your passion.
Venture Capital – Not so much for start-ups and usually not for companies looking for less than $1 million. Venture Capitalists will expect both equity and control. Do plenty of research before taking this route.
Trade or Barter – You may laugh but this is actually the oldest method of conducting business. Bartering is the exchange of goods or services as a substitute for cash such as trading the development and management of a website for some office space. If you can create a mutually beneficial relationship with another company to allow you to move forward with an initiative, bartering could be a perfect solution.
Form a Partnership – having others involved with a financial interest in the company will lighten your load. Make sure that you’re ready to share.
However you decide to move forward; take your time. These are big decisions that will affect your business tremendously. Do your research and good luck to you and your business.