10 Best Ways to Fund Your Startups in 2021
Raise money for your startups or small business is always a Herculean task. Imagine you have a brilliant idea, but you have not enough money to start your business. For new entrepreneurs, it is a daunting challenge. How to fund a business with no money in hand? This is the main question that the new business owner always tries to find the answer to. If you are also one of these, don’t worry because, in this article, we are going to tell you the 10 best ways to fund your startups in 2021.
To be honest, there aren’t any magical ways to get funding for your new business. Because nobody is waiting to throw money for your startup just because you have a new and exciting idea. But don’t get discouraged, there are some effective ways to finance your startups. I put my efforts to make a comprehensive list of the best ways to fund your startups in 2021. My aim is that startup founders can use this knowledge to grow their businesses.
Not just VCs funding. There are many options for entrepreneurs to raise money for their startups but giving them the right funding platform is the main thing. Read my list and learn the real ways that give you the option to sell for the right place or not sell at all. So let’s get started!!
10 Best Ways to Fund your Startups
1.Small Business Loans
Some banks also give loans to small businesses but in general, banks are careful in giving money to new businesses. But there are alternative lending companies which give fund for small businesses. In the U.S., you may find that the Small Business Administration (SBA) can get your initial funding without normal backup requirements.
Be careful before applying because some of these lending companies are greedy. Make sure you have a complete market search before borrowing money and sign an agreement.
2. Trade Equity or Services
Trade equity or services in exchange for money or other startups help. For example, negotiating free office space in agreeing with all computer-related issues for other office tenants. Another example is exchange equity in legal and accounting support.
One of the most common ways to get a business run is bootstrapping. It is the process to get out of a lack of money situation using existing resources. Basically, you can use your own money to fund your business. For example, you have some personal savings, low or no interest credit cards. Getting your free credit card report figure out the interest rate you will get on different loans.
4. Join Startups Incubators or Accelerator
Accelerator or incubation centers are very popular nowadays; they are often associated with universities, organizations. Most centers provide free co-working space, internet facilities, and other resources to startups while some will take equity. New startup founders can get a great start here while partnering with great and experienced entrepreneurs.
If you have a scintillating idea and you have a good number of followers on social media platforms, then crowdfunding might be an option for you. This is a source of funding where everyone can participate on online websites like Kickstarter and Indiegogo.
Here you can start a campaign for your business, people will pre-buy your product for later delivery, give donations or you can qualify for a reward.
6. Small Business Grants
Small Business Grants is also an effective way to fund your startups. These are government funds allocated to support new technologies and important causes such as education, health, and social. A good place to look at these grants is Grants.gov.
They offer grants to small businesses that are run by women, minorities, or veterans. If you fit into one of these categories, go to your local Chamber of Commerce, to see if there’s local grant money that you may be able to apply for.
7. Keep your day job
If you currently have a job that meeting your daily expenses and letting you live a relatively comfortable lifestyle then don’t be in rush to quit your job and just reliance on your new business. Run your business along with 9-5 jobs, so the job will paying your bills while your business will build slowly and go through the early and difficult phases.
8. Seek angel investors
Most metropolitan areas have Angel investors group of local high net-worth individuals interested in supporting startups. Find Angel Investors online by using Gust. You can raise angel money and grow it at the pace you see fit.
You should convince investors to invest in your startups. Do your homework and target high net-worth investor groups or individuals who have track records of supporting startups.
9. Venture Capitalists
Venture capitalists are a group of professional investors such as Accel Partner. They invest institutional money in qualified startups with a proven business model. They typically look for a high setup, investing a couple of millions of dollars with a proven team.
10. Raise money from Friends and Family
Hitting up your family and friends is the most common way to finance your business. But be careful before asking for money because when you turn your loved ones into creditors you are risking their financial status and jeopardizing their relationship with them.
That’s it; these are our 10 best ways to fund your startups in 2021. As might be expected, all the aforementioned financing option requires a good deal of consideration. One might be right for you but may not be right for others. For example, you have a good relationship with the bank manager, so a bank loan is a better option for you. Another example is you could have a supportive network of financially secure families willing to back your idea. Then raising money for your business from friends and family would be better for you in that scenario.
If you think this article is helpful, share this in your social circle, who knows if someone is waiting to read and implement these funding raising steps.