In addition to a terrific idea, one of the first things any startup needs is cold hard cash. Even if your idea is nothing short of brilliant, without financial backing, your idea may never see the light of day. Every day, startups of all types struggle to come up with the money they need to keep the doors open. The reason it’s so challenging to land the money needed is because wooing investors is an art form and not a science. Here are three of the best ways you can go about securing the money you need to keep your idea alive.
Quit Your Regular Job and Jump in Feet First to Show Investors You’re Serious
Unless you are in the business of starting and selling companies, the typical investor won’t give you a second look nor a single cent if they do not feel you are 100% on-board with your new business venture. This is why you should give serious thought to quitting your day job. Of course, transitioning from a steady paying job to an uncertain startup can be both frightening and difficult. However, if you can manage this transition you will be much more likely to score the money you need from a good investor in order to keep your dream alive.
Seek out a Grant
When it comes to finding money for a new business, nothing beats a grant. With a grant, you are given cash free of charge that you can use toward your new business venture. It will take some old fashioned hard work to find and land a grant but you won’t succeed if you don’t try. There are websites to check which list available grants in a wide array of categories to see if one may apply to your idea. It’s essential to realize that grants are available based on the type of business you’re starting as well as on your specific demographics. You can easily find grants available to minority business owners, women, single moms and more. In order to apply for a grant you will need to write an amazing proposal wherein you meticulously spell out every aspect of your business.
Turn Your Friends and Relatives Into Investors
One of the best ways to secure money for your new business venture is to bring your friends and family members on as investors. Choose those people who are close to you and who believe in your idea as these are the folks who will be most willing to take a chance on your growing startup. If one or more of them are business-savvy, great! People with business experience will make good investors as they will be more willing to forgive you for those small mistakes you’re likely make as opposed to outside investors who are less tolerant.
Raising capital from your own personal network makes sense in many ways. Mainly, it will show future investors that you’re backed by a network of people who have already bought into your idea. Of course, there are risks involved as you may suffer through some tough times with friends and relatives when things don’t go as planned. This is why it’s always best to keep your business relationships on the formal side and to be honest about risks and when laying out your business plan that the money will fund. Be sure to put all the rules of the investment in writing so that everyone knows exactly what to expect.
Read more here about how to best fund your startup to ensure it’s longevity and success.
