5 Simple Ways for Your Company to Raise Capital
It is a very difficult endeavor to run a company. Aside from the time it takes and your undivided attention, it would need enough financing to be able to effectively operate a company and keep your head above the surface. What this means is that you will still need to have enough funds to support it for a while, aside from the capital you have set aside to start your business. Or at least long enough until it becomes self-sustainable for your company. A sad fact is that up to 29% of startups fail precisely because they have run out of the funds needed to keep their company running.
This does not mean, though, that you should not even start up a company unless you are confident that you can completely finance it for a certain period of time. Although it is undoubtedly preferable for you to be able to do so, there are other ways in which you can raise money for your company and ensure its potential financial stability. That is why the Classy businesswomen team decided to share this useful article with you. If you need more tips for women in business head over to our blog,
Bootstrap your venture
For those unfamiliar with the concept, Bootstrapping essentially chooses to start a company with limited capital without expecting to rely on any external resources. What this means is that any funds flowing into the organization will come directly out of your own pocket. What this often means, of course, is a truly frugal lifestyle, both personal and business-wise, at least until the company is sufficiently safe to stand on its own two feet. And if you look a little farther down the road, if you genuinely plan to look for outside investments at any given moment, people would be more likely to invest in your company if they see that you have already invested your own money in it. This type of funding certainly carries a great dose of risk, but it will also significantly pay off once your business starts earning a profit.
Go for crowdfunding
By launching a crowdfunding campaign, another fascinating way you can choose to finance your company is. Not only on the type of venture you are trying to create, but also on your pitch, the success you manage to achieve and the funds you manage to receive will rely greatly. The better you present your business, the greater the chances that you will eventually be able to receive the funds needed for it. This is not only a fantastic way to gain support for your endeavour, but it also helps you to communicate with people with the same mind. This way, before you really truly begin, you can introduce your company to the potential audience. You will also gain a great deal from asking for and listening to feedback on your venture, so that you can improve and shape it according to your (future) audience’s needs.
Make smart investment moves
Alternatively, you should consider making an investment if you have secured enough funds for your company, but you want to ensure that those funds don’t just run out. As mentioned, if your company can be completely sustained and you still have some money to spare, study your investment options and find the ones that will guarantee a substantial or rapid ROI. Often, it would probably pay off better than having a single large one to be able to make many smaller returns on investment. However, before you start, you should certainly look for reputable investment brokers to meet with to ensure that you make a wise investment decision.
Reach out to angel investors
Angel investors are likely to be the best mates of every new venture or start-up. Most commonly, Angel investor is a person who is willing to pour their funds into a company that nobody else is yet prepared to finance. Most generally, you would be expected to have convertible debt or even ownership equity in return for financing. And while angel investors are normally more likely to lend you the funds, you still need to provide them with a confident pitch, genuinely believe in your business, have a clearly established exit plan, and in general know your stuff. What this suggests is that a thorough competitive study, as well as marketing and salt, should be presented with in-depth market research, a detailed competitive analysis, as well as marketing and sales plans.
Ask your family and friends to help you out
Possibly the first thing someone looking to start a company does is apply for some form of financial assistance from their family and friends. The greatest error that typically occurs here, though, is that individuals choose to do so before they already have a solid business strategy in place. If you’ve really asked to borrow less than you need, this not only causes uncertainty, but it can also cause some serious friction between you as a borrower and the friend or family member who borrowed the money from you. In addition, you will need to bear in mind that by asking them to borrow money from them, you could potentially affect someone’s financial future.That’s why, if you were to apply for a loan from a bank or some other lender, you ought to treat this matter just as you would. You have to come up with strong structured financial forecasts and determine how you are going to pay back the money. If you put all of this in writing and establish a kind of IOU agreement with the person from whom you have borrowed cash, you will be more likely to take this matter far more seriously.
Therefore, even if you can’t completely fund your company yet, realize that there are still ways you can find the money you need. The thing is that probably no one in this universe made it solely on their own, so it’s all right to ask for support and, if possible, accept it.
