10:15 AM
No truer words have ever been stated. Today we discuss the article by Faizan Raza at Business.com titled Finding Funding: 5 Surefire Strategies to Finance Your Startup.
The article discusses the 5 most common ways to obtain financing for a new business. They include:
- Credit Cards
- Venture Capitalists
- Angel Investors
- Crowdfunding
- Government Grant
We will discuss these funding methods in the opposite order.
Government grants are a great way to get free money - as some may call it. They problem usually lies in the ability to obtain those government grants. In order to have a better chance at obtaining a grant, you will want to hire a "Grant Writer". A grant writer is someone who specializes in writing precise and detailed documents in the language, with the terminology and structure that will make it through the review process.
The author makes an excellent point of having you focus on smaller grants that may have less competition. Job creation is a must-have in your document, so make sure you emphasize it.
Crowdfunding can be a toss up for your business. Some are extremely successful and some never come close to their goals. The high-risk of crowdfunding is exposing your idea to others, giving them the ability to take your idea and run with it. Remember that crowdfunding sites are places for entrepreneurs, so good ideas are seen by people who may have more capital than you do.
How do you make crowdfunding successful? The number one thing people see is your video. Spend time and money on a great video. If your video catches people's attention and they share it, you have the ability to go viral and meet your goal.
Angel Investors sound great, if you can find one. There are many companies out there now having conferences about "Find an Angel Investor" or similar. You must be careful about the companies that have you sign up for a consulting agreement, then give you money, take the money back for consulting fees and keep an extremely high percentage of the company, leaving you without any real money and no company.
Venture Capitalist are a startups lifeline to success. For companies seeking hundreds of thousands, millions or even hundreds of millions, venture capitalists are the target market. This will require a proven track-record of success from the CEO, those people around her/him and probably the company.
Individuals who have not had previous substantial success, usually do not qualify for venture capitalist funding. A VC is looking for someone with a proven track record that will have a high-rate of success.
Credit Card Funding is the topic we most want to talk about. Most people qualify for credit cards. Credit cards can be an easy access to money. The key though, is being able to maximize the amount of credit you are able to receive from those credit cards, to minimize the interest rate and to have an affordable payment amount.
Credit Pathway offers a Line of Credit program that can help you maximize your credit to obtain a funding amount much higher than you would on your own.
How do we help get you funded? We give you knowledge and support.
Credit providers are looking for a low depth/credit percentage - we can help get you a term loan to paydown your cards, or you can simply request an increase in credit on your existing cards. Remember that you want to have a maximum use of 45% on ALL of your cards and best to keep it around 30%.
Increase your credit by adding Trade Lines. Authorized User Trade Lines (Piggybacking Trade Lines) are typically revolving lines of credit on which someone places another as an authorized user account holder. The Trade Line then appears on the user’s credit. Take a look at the video about trade lines.
Setup your business correctly. An LLC or Corporation will increase your funding capability and give you structure and protection. If you need help setting up an LLC or Corporation, visit our LLC / Corporation Builder page.
Thank you for your time and we hope this helps you get the funding you are looking for.
The original article appeared at: http://www.business.com/business-loans/5-surefire-strategies-to-finance-a-startup/
