3 Ways to Fund Startups

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Looking to fund a startup? Here are 3 great ways to do so.

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1. Self-Funding

One of the most common ways of funding a venture is self-funding. Professional investors usually have a word to describe it; having skin in the game.

When you use your own for the venture, you are sending out a message that you are serious and committed to the business. In order to do this, you must have liquid assets or savings. When you invest your money in the business, other people are going to see this as a positive thing because it shows you have faith in the business to a point where you are willing to risk your money to start and grow it.

When you are self-funding, you have control of the company during the earlier stages. You can also consider a grant to get your start up off the, find out more at USGrants. Crowdfunding is another option that is going to give you control. When other investors are funding your company, you have to give away equity or take debt, which can end up affecting your bottom line.

 

2. Crowdfunding

This is a good way to fund creative projects or gain initial capital the company might need to fund a new product. There are different options with crowdfunding, and this is why you need to take your time and choose one that is going to work best for you. The most popular options are equity-based crowdfunding and rewards crowdfunding.

Whichever crowdfunding method you go with, you will still have a low-risk option that will help you get the word out about the products and company. You will have funds to use manufacturing the products. You are going to have early adopters who are going to provide valuable insights.

Another benefit from crowdfunding is marketplace adoption, which helps when you are looking for investors. The investors are going to see that there are buyers ready to put money into your idea, which makes them more likely to invest in your company. When you have a reward-based crowdfunding method, you are going to have control of your business, and many artists choose this option because they want to maintain their artistic freedom and not have to worry about getting censored.

 

3. Angel Investing

Angel investing has become popular because of Shark Tank, but it has been around for some time. It started to become popular because of the many TV shows doing it. There are many entrepreneurs that have managed to get enough funding for their ventures through angel investing. You are going to get funds from an investor, and some even provide mentorship. This is valuable especially when it is an experienced investor. Some angel investors come in at the seed stage and can invest over one million. There are times when many angel investors come together and become a funding round.

If you want to reach investors, you need to put effort into networking and knowing the right places to look for startups for any business. This can be engaging on social media, guest blog posts, LinkedIn groups, etc. When more people get to know about the company, the more positive reviews they leave, which is a good thing because it can get investors interested.

Seeking an angel investor during the early days of the company is a good idea, but it doesn’t mean it is the best option for everyone. When angels like VCs invest in a company, their main focus becomes getting a good return on their investment in the shortest time possible. Some might ask you to give them more control of the business, which isn’t something most are comfortable with.

 

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