Wanna raise money for your startup company?
Funding is the lifeblood of every startup.
Without funding, you can’t “take off.” You don’t have the cash you need to get your product up and off the ground.
I wanted to bring attention to a few online tools and ways that you can use to get startup or working capital for a new business.
These websites and tools will help you raise money for your small business or startup company.
Hope you enjoy the video below!
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Let’s talk a bit about raising funds for your startup company.
All Companies NEED Cash
Without cash, your company is dead.
Your body needs blood to survive, move nutrients around, and power itself. A company needs cash.
Think about it.
Without cash, you can’t hire team members. You can’t develop a product. You can’t market that product and present it to consumers.
Every company that is successful has cash to fuel its operations. Even big companies that haven’t yet made a dime of profit still have a war chest of funds that they can use to grow their operations.
These same companies must also continually raise funding through funding rounds.
Now that you know you need cash, the question is… how do you get it?
Money is Exchanged for Opportunity
There are many different ways to raise capital for a startup company.
In general, all money is only exchanged because of the promise of a future opportunity.
For example, someone will lend you money out of the opportunity to earn it back with interest, which grows their initial funds.
As another example, someone will invest $10k into your company out of the opportunity to earn 10x that when you sell your company, distribute profits, or do an IPO.
All money is exchanged for an opportunity. In the case of a website like Kickstarter or Indiegogo, that could be the opportunity to pre-order a product or own a copy of it.
To secure funds, you better have a great opportunity and pitch!
Startup Fundraising Explained
There are different types of startup companies. You could have created a physical ecommerce product. You could have coded an iPhone app. You could have designed a service that meets a core need.
Depending on the type of company you have, it’s going to affect how you do the fundraising for your startup company, along with the websites you’ll look into.
For example, if you want to open up a deli, it’s highly unlikely a venture capitalist will be interested in that opportunity. That’s because they must allocate millions in capital AND get a return for their investors. They simply need to write a bigger check.
As another example, if you’re offering a service, like coaching or consulting, you probably aren’t going to be using crowdfunding to raise the funds to start that business. Crowdfunding and services don’t go together as easily.
I have a great article here which details how funding rounds work and how to go about the process. This is a good place to begin if you’re unfamiliar with startup funding.
Simply put, you’ll need to raise capital in order to fund each stage of your business. There are different phases like:
- Pre-revenue
- Pre product-market fit
- Funding to purchase inventory for sale
- Scaling, etc
If your company is still in the idea stage, then it’s probably not yet a good fit for funding. The days are gone where you can simply raise money off of a snappy presentation. You need to create a prototype, show demand, and potential.
Which Type of Fundraising is Best?
Personally, I’m a huge fan of crowdfunding because it accomplishes at lot of things at once. Crowdfunding will:
- Get you the funding you need to mass produce the product
- Validate your product and business idea
- Connect you with real customers
- Lead to creation of valuable marketing assets
- Give you a crash course in business
If you’d like to learn more about crowdfunding, I invite you to join my weekly newsletter down below or subscribe to my YouTube channel.
I put out videos regularly on the process of crowdfunding. You’ll quickly see how to get started!
