Startup Capital: 4 Funding Options

Raise Start-Up Capital - Complete Controller

According to a study, over half of new businesses tend to go downhill during their first year of operations. A lack of funding options has been identified as one of the primary reasons for that. Cash is vital to every business and is indispensable to achieving business success. Business owners are always looking to find different ways to finance their businesses, either for expansion or to sustain their current business model. 

Businesses may require financing for many reasons. However, regardless of the need, you must know how to get the funding. Below are some of the options that are worth looking into.Cubicle to Cloud virtual business

Funding Options


Bootstrapping (or self-funding) is one of the most effective and recommended ways of funding a new business. It is challenging for first-time entrepreneurs to acquire funding as they are new and may not have a financial history. Persuading someone to invest in your business is a tricky job. Therefore, the best action plan is to use your savings to fund your business initially. You can also ask your family and friends to help you if they have the means. You can offer those who invest shares in the business for their investments. Because these people are close to you and you most likely consider them trustworthy, they are the first ones you should contact when searching for potential funding options.

Bootstrapping allows you to own your business from day one, as you have invested your money into the venture. Later, investors may view this as a positive aspect. However, this option is only suitable for businesses that do not require significant cash flows. Gathering and organizing all your financial resources in your bookkeeping records is vital to bootstrapping.

Crowd Funding

Crowdfunding is a new and popular way of raising finances for new business start-ups. It is a contribution by many people at the same time. You must set up a detailed business description on a crowdsourcing platform. The description should include details about the company, its product offerings, goals, how it will generate revenue, and so on. People who visit these crowdsourcing platforms view the whole concept and invest in it if they are interested. All these people are stakeholders in your business, depending on their investment.

Using crowdsourcing as a funding option is a great way to generate capital and market your business. More people know about your business, so it is like free marketing. You can also know in advance that your business will generate satisfactory interest among the audience. It offers you a broader perspective of your plan to be an entrepreneur. Crowdfunding, however, is quite competitive, and you have to provide a solid business plan for people to take an interest in your business idea.CorpNet. Start A New Business Now

Angel Investment

Angel investors are people with excess cash and a keen interest in investing in new start-ups. They usually operate in groups to screen out many potential investment options. These are experienced businesspersons and fall among the ideal funding options for any new business. Along with their capital, they can also offer mentorship and advice to new entrepreneurs, which are of immense value at the start of your business.

Today, angel investors have helped start many successful businesses. They offer their capital and advice in return for a specific percentage of equity in the industry. It is a win/win situation for both, making it one of the most lucrative funding options.

Venture Capital

Venture capitals are professionally managed funds interested in businesses that have solid potential. They invest in a company in return for equity. However, they tend to exit a business once an IPO (initial public offering) or acquisition of the business happens. They evaluate the company from a broader perspective and determine if it will sustain the test of time. 

Venture capital funding options are ideal for small businesses beyond the starting phase and already generating sustainable profits. It would be best to have an exit strategy to lure in a venture capital investment. One downside of venture capital investors is that they tend to attach high expectations from businesses. Therefore, if your business is underperforming, they may not be interested in you.Download A Free Financial Toolkit


If you want to grow fast, you need outside funding options. If you bootstrap and remain without external funding for too long, you may be unable to gain market opportunities. While the surfeit of lending options may make it easier than ever to get started, responsible business owners should ask themselves how much financial assistance they require before making a final decision.

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