How to Get Investment for Your Startup

Peter Ellington

How to Get Investment for Your Startup

If you’ve got a great new business idea, you might think the rest is easy. The reality is – that’s simply not the case. Raising funding for your project is important – and it could be the biggest factor in determining whether you’re going to be successful or not. Many great ideas fail because the right funding wasn’t secured early enough. So how do you get funding for your business startup? We’re going to look at some of the best ways.

Private investors

Private investors are always looking for great new ideas. They’ve got the cash and will require a percentage of equity in return for it. The great thing about private investors is that they can bring a level of expertise to your project that isn’t necessarily available when souring money in other areas. That being said, they also might require a level of control that you’re unwilling to give up. Not all private investors are hands-on, some will be willing to invest as silent partners – but make sure the parameters are clear before making any agreements.

You’ll also need to make sure you don’t give too much of your business away in equity. Some investors will ask for a large chunk of your company in return for both their money and their time. You might feel like giving away a large percentage of a company that isn’t worth anything is a good idea – but if you make it big, that could be a big mistake.

The bank

Banks actually offer a number of small business or investment loans that could be right for you. The good thing about bank loans is that they won’t require a percentage of your company, but you might find them rather un-flexible in their terms. Banks normally only like to invest in tried-tested sorts of businesses that will guarantee them a return, so if you’re setting up something experimental – they might not be right for you.

Crowdsourcing

If you haven’t heard of it already, crowdsourced funding is a great new way of getting small investments from a large number of people. In recent years, crowdsourcing has become massive and really has helped launch a number of successful businesses.

The great thing about crowdsourcing is that it helps tie people into your brand, giving them early access to great features without forgoing any equity share. Some also argue that crowdfunding is a great marketing tool as not only does it help raise investments, it helps in-build fans for your product.
If you’ve got a highly innovative idea, crowdsourcing could be for you.

Sources:

http://www.crowdinsider.com/fundrise/

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