The number one question that every founder faces is how do I fund my idea.
We often hear the conundrum from founders: ‘I have this great idea but if I only had the funds’.
It’s common knowledge that you’ll need at least some initial funds to launch a business. And the limited mindset of ‘if only I had funds’ is considered the speak of wantepreneurs. Entrepreneurs know this is part of the game and process BUT the ones that survive also know how to get the funds for their business. Below are some of the best and more popular ways to raise funds:
Crowdfunding:
This is the ideal choice to raise funds and we highly suggest ALL entrepreneurs do this regardless of their project type. You are literally having your customers kickstart your business by pre-ordering and investing directly into the product. This requires very little upfront capital other than the marketing materials, samples/prototypes, and a hell of a lot of sweat equity; but that’s just your time. These crowdfunding platforms are literally build for this exact purpose – it’s almost silly not to throw up a campaign.
Some of the more popular crowdfunding platforms are:
- Kickstarter – https://www.kickstarter.com/
- Indiegogo – https://www.indiegogo.com/
Customers:
It may sound straightforward but there are so many entrepreneurs who believe they need other sources to fund their business.
Our rule is if the product can generate revenue then this is the option you should take.
Save up and invest the minimum amount to get your product in the market then literally grow one sale at a time. This is the gradual and methodical approach. This is the “I want to be around in 100 years” approach, you aren’t rushing to “unicorn status” to only be in a graveyard like Gilt, Livingsocial, OneKingsLane, etc.
Note: if you have a product like Snapchat, Instagram, or Facebook that relies on ‘eye-balls’, and the amount of time users spend on your platform, then focus on user-growth and aim for VC funding (Venture Capital) once you can show that users are spending dedicated amounts of time on your site or app. To show that, build a barebones MVP and share it with your users.
Angel Funding:
We are only covering angel funding in this post because Venture Capital usually comes into play at a later stage in your startup’s lifecycle and if you are reading this to learn how to raise funds to get things off the ground, you don’t need to be thinking about VC’s yet. They typically only invest once they see some traction.
Angels on the other hand come in a little earlier. While Angel funders have a higher tolerance for risk as compared to VCs, they will most often require some form of prototype, MVP, or proof of concept. That proof of concept could be getting as little as 100 users and that’s totally fine, they will want to see something. Here at Reliable Bits we specialize in helping founders get to this point. Case in point, with Florish, she created an MVP with us for under 9K, got some orders then went on to raise Angel funding and is now raising VC money.
Regardless, money should never be the reason why you can’t start a business. If you are still not convinced, I urge you to literally give us a call right now (212) 729-4229 and we will show you how you can do it. There will be no selling, just a free advisory call to talk through how you can do it !!