|By Aina Ster|
September 10, 2019
Nothing beats the sense of pride an entrepreneur feels when they start, develop, and establish a successful startup. However, in the absence of adequate funding, this is just but a pipe dream. Finance is the most crucial component for the success of any business venture. Nevertheless, the statistics are heavily against the success of many startups. It has been proved that about 90% of startups collapse after less than two years of operation.
5 Tips for Getting Funding For Your Startup
Statistics also show that only half of the small businesses started back in 2011 survived. Even more daunting is the fact that these are not the worst of the problems a new entrepreneur faces. To acquire funds to start the venture is the greatest of all challenges and as the days go by, this is becoming an uphill run. Owing to many startups coming up that need funding, investors are raising the bar in a bid to invest in a venture that seems right for them. As such entrepreneurs also have to be more convincing. Here are a few tips that you could adopt to increase your chances of getting funding:
1. Have a practical venture idea
As an entrepreneur, you should have an investment that you can comfortably finance without worrying about its viability. Investors are bound to be attracted by a venture whose owner has already significantly invested in. Belief in an idea is great, but taking action is proof enough of your commitment to the business. The strong message of confidence reassures investors that whatever they are investing in is of worth. Contentment with only the sweat equity does not reflect well on potential investors.
2. Know your business plan perfectly
The business plan is the one component that determines whether you get the deal or not. A well-detailed business plan is bound to move potential investors while a crappy one will send them packing. Have a strategic business plan that shows the market gaps you wish to exploit, your competitors weak points, and most importantly, the expected financial projections. The long term vision of your venture is also music to the ears of investors. After all, no one can invest in a visionless and futureless venture.
3. Be open to multiple sources of funding
An entrepreneur should be open to almost all sources of funding available. They should be willing to turn to other sources such as grants, RFPs, loan programs, and even available forms of Series A Funding. Most startups need several rounds of funding and you should not be limited to the available funding streams. Other types of funding are also available for startups A federal grant would be suitable for a renewable power or even a biotechnology venture, for instance. Currently, various states are open to helping young entrepreneurs with financial support at affordable terms.
4. Try Bootstraps
For startups, getting value for every resource is critical. It should be noted that at the initial stages, the cash inflow is not very high, and cutting costs is a priority. As such, bootstrapping can help run operations. In a bid to cut costs, startups can explore options like:
- Maximizing on the available resources; sharing offices, sharing equipment, etc
- Teleconferencing to reduce travel expenses
- Incorporating interns from relevant fields
- Having good business contracts that are beneficial to you and your suppliers
- Sharing resources with other organizations i.e., internet connection, electricity and other things
Networking is the new norm of doing any business in the current world. As an entrepreneur, you can get funding for your venture by simply having the right connections. Platforms such as LinkedIn are proving to be critical in networking. On such platforms, you get to meet with other entrepreneurs who might have ventured in your field and who can advise you accordingly. Such individuals can further direct you to institutions that can fund your venture.
Starting and running a startup is no easy task. However, self-belief and motivation can propel you to greatness. Having the right information can also take you a long way. The above tips are perfect for startups looking to get funding easily and efficiently. You should not be afraid of failure as life-changing lessons and experiences come through experience.
|Aina Ster is a Member of Macroaxs Editorial Board. Aina delivers weekly prospective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments. View Profile|
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