2017 is the time for your business idea to take flight.
In a world connected by the internet, you can get a hold of everything and everyone you need to pursue your entrepreneurial endeavors. Whether it’s a tool for self-managing your finances or resources for acquiring business-related skills, nothing is ever out of reach as long as you know where to look.
Although online business ideas are now easier to come by, thanks to the examples of countless self-made entrepreneurs out there, funding remains one of the biggest challenges that entrepreneurs continue to face.
Aside from bootstrapping your business from the ground up, below are 7 tips to get funded this 2017:
1. Settle Your Debts
You may be thinking: “What’s the importance of being debt-free when it comes to funding?”
Throughout your quest to fund your business, you will come across meticulous investors who’ll investigate your personal finances before they shell out cash.
Of course, no one likes to invest in someone who makes poor financial decisions. If you want to attract investors, you need to assure them that their money is safe in your hands.
2. Start at the End
Before you start preparing pitches, you should start at the end and identify important milestones throughout your funding campaign.
This means outlining the growth of your startup according to accomplishments like reaching a specific number of customers, selling a minimum number of units, or generating a certain amount of web traffic to the company’s site.
To boost the confidence of prospective investors, you need to provide reliable estimates of the capital and time you need for each objective.
3. Look for Investors Early
It’s never too early to get acquainted with potential business investors. In fact, you should consider meeting with them even before you craft your business pitch deck.
A straightforward strategy is to inspect the websites of VCs near your area. Look for speaking engagements or other events you can attend so you can introduce yourself.
Take note that networking is the key to bringing relevant people to your ventures. If possible, look for small business accelerator programs you can join to receive mentorship from experts.
4. Validate through Crowdfunding
Crowdfunding has been an integral piece for driving the startup industry since 2010. But there’s more to it than meets the eye.
By promoting your crowdfunding campaign in platforms like Kickstarter and Indiegogo, you are also making your business or product idea subject for validation. If you successfully hit your funding goals, it means other people – including experienced investors – see potential in your idea’s profitability.
5. Don’t Forget Angel Investors
You should never shut your doors on angel investors if you truly want your business to take off.
Angel investors can be anyone amongst friends, family, and mutual connections that, according to SEC standards, has a net worth of at least $1 million and an income of $200,000 for the past two years.
Since this type of investor focuses more on the entrepreneur, you need to have a deliberate approach and adopt the qualities they’re looking for.
Other than individuals you personally know, you can also look for angel investors in websites like AngelList, Gust, and Angels Den.
6. Consider Bridging Loans
First things first, what is bridging financing and how does it help small businesses?
If your business idea requires a physical location to operate, then you have a few financing options to consider. Apart from traditional lenders like a local bank or the SBA, you can also seek bridge financing solutions to secure the money you need.
Bridging loans provide entrepreneurs the opportunity to move their home-based businesses into commercial establishments. They also help freelancing businesses afford much needed office space for sustained growth.
Although bridging loans have faster approval rates than traditional loans, they are typically backed by some form of collateral. This is usually another piece of property that you’re currently willing to sell.
7. Use ROBS – Rollover for Business Startups
As a last resort, consider leveraging your retirement savings to get your business funded.
Although this method is not applicable for everyone, those who have access to their retirement funds can avoid early withdrawal penalties, income taxes, and a ton of paperwork.
Just remember to weigh the risks carefully and include the upfront and monthly monitoring fees in your calculations. These amounts are around $5,000 for the initial setup fee and $120 per month for the ongoing fees.
In short, make sure you’re not sacrificing your golden years just so you could jump-start your business venture.
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