What are the different ways to get funding for your startup?
Family and friends? Angel investors? Venture capitalists?
We’ll cover it ALL today. By the end of this training video, you’ll learn about all the different channels you can tap into to bring funding into your startup or small business.
Remember – funding is the lifeblood of EVERY company. No big company has survived without multiple rounds of funding. That could be from outside sources, retained earnings, or the founder him/herself.
At the same time, startup funding is probably one of the most boring topics out there. Most entrepreneurs don’t want to deal with it, because when you’re raising money, you’re taking time away from building your startup.
The video below will introduce you to a few simple ways that you can get funding for your company.
I’ll hook you up with the subscribe link if you want weekly videos from me. I share tips, advice, and resources that you can use to get financing for your startup.
Now that you know about some of the channels out there you can use to raise money, you might be wondering what’s next. Where should you go from here?
Personally, I’ve found that the money is actually the least important part of startup financing. The question is… what do you need to say, do, or convey in order to get an investor to hand over the money and invest in your company.
Funding is a by-product of buy-in
When someone is convinced of something, I refer to them having “buy-in” or that they are bought into what someone is selling.
That individual believes:
- The product or service is right for them.
- Good things will happen if they buy it.
- They won’t regret their choice. It’s a good decision.
We don’t only buy into products, but also other people’s perspectives, values, and even religions. It’s plain and simple as following someone else because you believe in them.
This same phenomena happens in the startup funding arena. You will only get investors to part with their funds if you get them to buy into the vision that you have for your startup company. They have to believe that their money will be worth MORE over time.
When you secure “buy-in” then you’ll also get investors to take action and invest in your equity crowdfunding campaign or other financial raise. If you’er interested in equity crowdfunding, here are some other things you’ll need for your launch.
Vision, storytelling, and sound logic creates buy-in
It’s a hard and fast rule that human beings make decisions based off of emotions and justify those decisions with logic. The same happens with investing (no matter how much smart people tell you otherwise).
The story that you tell about you, your company, and your brand is what investors will use to get a sense of who you are and what you’re capable of. It’s what will peak their emotional interest, causing them to spend more attention on you and actually listen to what you’re saying.
Storytelling is also a great set up for future-pacing techniques or illustrating a future compelling vision that investors want to be a part of. Your vision is where you’e going. If you don’t have a vision, you don’t have a roadmap, and that spells disaster.
Finally, the numbers, statistics, graphs, and logic behind a project is what allows investors to sleep at night, knowing that they’ve made a sound decision. This is a critical part of every campaign. You have to show how your business is profitable, scalable, and defensible.
Funding rounds and crowdfunding
There are multiple funding rounds in the lifecycle of a startup company. This isn’t true of every company, but for those that are fast-growing technology startups, it certainly is.
Crowdfunding typically comes into play in the early-stage funding rounds. Think less than $1 million for Reg CF campaigns and ~$10 million for Reg A+ campaigns.
This means that if you’re in the early stages of a startup, you could look into crowdfunding as one means of securing the financing to either start, grow, or scale your business.
For those entrepreneurs that have businesses in the later stages, it’s probably not going to be a very good fit for you unfortunately. I’d look more into established VC firms.
While the process of raising money isn’t very fun, now you have a few simple channels to go off of and help narrow down how you’re going to kindle cash-injection into your growing company.
I hope you enjoyed this YouTube video and if you did, take a sec to give it a thumbs up so that other people will also discover it. I appreciate it a lot and wish you luck!
