Now more than ever, it’s easier and more attractive to start a business and work for yourself. Startups are becoming increasingly common as they internet makes it increasingly easier to launch a website and start selling products or services. The way these startups are finding funding is also changing, with entrepreneurs finding new and creative ways to propel their idea to the next stage. Here are 6 ways to fund your startup.
Bootstrapping, or funding your business yourself is one of the most common and easy options. At the same time, this can also eb a risky move. At first it may seem like you can afford to pay for new marketing campaigns or hiring employees but your spaending can get quickly out of hand. This is why it’s important to know what your own personal investment cap is. Getting yourself into debt is dangerous for both yourself and the company. Know your spending limits and make sure you think critically and get feedback on your spending.
Take advantage of special grants.
Many governments seek to fund innovation and business as it’s great for their economy. Seek out startup and business grants in whatever city you operate in.
Some places will even pay for people to relocate and work from their city. This year, for example, Vermont is paying up to 100 people $10,000 to move and work in their city. You could even rent out your property to earn a passive income, or sell it as an investment property on online marketplaces like Roofstock.
Friends & Family
A more traditional way of funding your business is to call upon friends and family. It’s often difficult to acquire funding from banks and investors, particularly if your business is internet focused, however, friends and family are typically more willing.
This method is not without its risks and if it goes wrong it can negatively impact important relationships. It’s important that both parties have a mutual understanding of how the deal will work. In many cases, it can be wise to get legal advice from both sides.
Find a Passive Income or Side Hustle
Today, there’s so many ways to make money. Thanks to the internet and in particular, the sharing economy there’s ways to make money that require very little effort or just a few hours of your day. These side hustles can be something you do on the side for fun, like dog sitting, or something that’s tied to your sttartup, like renting out extra parking spaces at your office. The extra cash earned from these jobs can be put back towards the business.
Crowdfunding has beed around a while now and it has seen many successful projects launched. Crowdfunding works best for interesting and fun ideas that attract attention which can also offer “funders” an early product or some kind of “value”.
A newer form of crowdfunding is one that offers equity, so if you want to give away some company equity, this could be an option for you.
Hackathons and other incubator run contests can be a great way to take your startup to the next level. Sure, it might seem like a lot of effort to apply, attend the event and work through whatever task they pose, especially when you could be focusing on your core business, but these contests can be more valuable than they first seem.
Firstly, you can spend the time in the competition working on a new idea or improving an aspect of your business. This is a great way to brainstorm and test ideas with little to no consequences. Secondly, there’s sure to be a bunch of likeminded people you can connect with who might be in the position to invest or help you in some other way. And lastly, there’s the possibility of winning the competition which usually comes with prize money which you can invest into your company.