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

Online crowdfunding platforms have grown in popularity during the last few years. Typically, they provide fundraising services to assist companies in acquiring capital to introduce a specific product. Using crowdfunding to raise money and pre-sell your products can be a great idea. If you meet your fundraising target, some crowdfunding platforms will only release the money to you; however, the platform can keep a cut of what you raise.

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

Private investors that make seed stage investments are known as angel investors. They are called "angels" because investing in a nascent company carries a larger risk than typical. If you have the necessary connections, it should be quite easy to get an angel investor for your business. You can locate them through visiting start-up events or by exploring social media platforms before reaching out to them with your startup pitch.

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.