Funding Options to Raise Capital for Your Start-up Business

As a start-up Founder, you face multiple challenges. You’re trying to succeed where 90% of people fail. You need help to do it, no matter how capable you are. You’ll need to look for outside sources of capital to help your start-up grow beyond the ideation.

Fundraising can help your start-up’s growth, but knowing when to start is difficult because raising funds is more complex than pitching your idea and receiving funding. Here is a comprehensive guide that lists some startup funding options to help raise funds for your business.

Bootstrapping

Bootstrapping or self-funding is one of the most common methods of starting a business. Bootstrapping is all about running your business with your own money. This money could come from your savings, low or no-interest credit cards, or mortgages and lines of credit on your home. Self-funded businesses don’t use traditional funding methods like investor support, crowdfunding, or bank loans.

Crowdfunding sites

In the past few years, online crowdfunding sites have become popular. They usually help businesses raise Capital to launch a particular product by offering Fundraising Services. Crowdfunding can be an excellent way to pre-sell your products and raise money for them. Some crowdfunding sites will only allow you to access the funds if you reach your fundraising goal, and the site may take a percentage of your earnings.

However, crowdfunding can be time-consuming and requires putting information on the site, often with a video or photos of the product.

Friends and Family

Borrowing funds from friends and family is a traditional approach to starting a business. While convincing investors or banks of the quality of your idea may be more difficult, your family and friends are likely to believe in your goal. They might be more willing to contribute to the funding to your company. If you seek loans from friends and family, get them with some legal documents, especially if the money is procured as a loan.

However, there is a disadvantage too. Sometimes borrowing money could become a quick way to lose your friends and family. Be careful while doing so.

Angel Investors

Angel Investors are private investors who make investments during the seed stage. As the risk of investing in a new Company is higher than usual, they are referred to as “angels.” Finding an Angel Investor for your Company is relatively simple if you have the right connections. You can find them by searching on social media websites and then sending them your start-up pitch or by attending start-up events.

Raise Money through Bank Loan

Individuals who approach banks with solid business plans are given financial backing on loans. The Business Plan must be well-structured to convey the strategy, profit forecast, and expected time of maturity.

Generally, banks provide financial services in two ways: working capital loans and funding.

Working Capital Loan: This loan is intended to cover one complete revenue cycle. Stocks and debtors are typically leveraged to the limit.

Funding: This process involves submitting the Business Plan, concise valuation information, and the project report on which the loan was approved.

Get in touch with Kick Advisory services to raise funds for your business. Their Fundraising Services include new funding for expansion capital, debt refinancing, and optimizing the cost of capital to enhance total shareholders’ return. You can also hire Kick Advisory for Business Valuation Services to know the value of your business. Kick Advisory is well-known for having supported and guided a lot of start-up to success.