- April 11, 2016
- Posted by: Chowdhury Shahid Uz Zaman
- Category: Finance
If you did not have the money you require to start your business, what would you do? To my great disappointment the answer is expect to have recourse to start your entrepreneurial adventure. Only very few bold answer that begin with what they have and the way they would adjust what it takes to get financing.
From my own experience there is nothing more dangerous than to have financing in the early stages where the entrepreneur has not created its model business because it does not yet know what product or service (value proposition) sell and who to sell (customers) and much of this resource is wasted on actions that do not produce value.
Following this, I made a research on the types of funding possible to carry out your idea. In some cases I have used some of these options has helped me in my projects. In the image below I show some financing options to get the money for your company.
7 ways to get money for your company
1. Angel Investors
They are those who can make a lot of money for your company, but usually they ask for a percentage return. The aim is that these people have shares in your company for some time after selling them at a higher price than you invested. Generally this option is for companies such startup.
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This type of financing has become fashionable in recent years with very positive results. It is a model of collaborative economy where people are a great ally for you because if you have any innovative product can receive funding without giving in exchange shares in your company. This model works well for companies that want to test whether a product is succeed without having to develop the same. There are several crowdfunding platforms where the support of users managed to get more than 10 million.
3. Risk Capital
This alternative is for a little more established companies that already have a business model validated and are functioning well and require sufficient capital to scale quickly; An example of this would be for a local company that wants to expand to other countries. Usually investors in this type of scheme usually ask for a higher percentage stake in the company.
4. Savings Own
Perhaps this is the fastest and most common option to start your business but as mentioned above is not the most usual. Simply collect your savings and arrange to start your project.
5. Public Financing
Those programs, funds, grants, etc support that foster entrepreneurship and business development by government institutions. In many of these cases the government grants a certain amount of money for business development and entrepreneurial puts elsewhere. It is very common that entrepreneurs consider this alternative as a first option.
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6. Family and Friends
Also known as “Friends, family and fools” that would be something like “family, crazy friends”. This option are our family, friends and as the name says “crazies” who are willing to lend us the money we need for our enterprise, usually this option is very similar to that of own savings and is used when the amount of money is not much to start.
Commonly called Banks, this is an alternative to starting a bit complicated because you need a credit history with the financial institution and certain requirements to apply for a bank loan, usually commissions are very high. As you will realize there are several options to start your business, some you may seem easier and other difficult to access. My advice is not to despair if you do not have the funding required personally have survived with my own earnings in companies until I could finally get an investment of money to grow my business. What kind of financing you choose to start your business?