The 21 st century is the age of rapid technological development. However, while in the past this was something reserved only for the greatest tech conglomerates and government sanctioned workshops, today, there is an astounding private initiative present in this sector. After all, most of the power-players in this industry have started as garage startups. Still, before you can begin paving your way towards growth, you need to think about funding to help your startup succeed.
1. Bank Loan
The first thing you can do if you don’t have enough funds to run your startup is try to apply for a bank or credit union loan. For this, however, you have to have a positive credit rating. This means that these creditors will not only examine your solvency and existing assets, but also your financial behavior with previous loans. If you had no late payments or similar issues, you should have nothing to worry about; if you did, well… there are few ways to fix this, but it might take some time.
2. Sell Your Account Receivables
While apps and games usually work on a one-time purchase basis, this is something that seldom happens in other niches. Sometimes, people won’t have the money to pay you right away so if you allow them to pay you over the course of time, you can win them over and turn them into your customers. Unfortunately, this means that you will need to wait for your money a bit longer. If you ever find yourself in need of a capital injection, you may want to consider selling your account receivables. According to experts behind The Invoice Market, this is one of the easiest ways to free up your balance sheet.
In 2017 everyone knows about Kickstarter, which is by far the most popular crowdfunding platform for individuals and small enterprises. A lot of present day video games are funded this way, but earning money this way is not easy. Sometimes a legitimate idea might fail, while there is a guy who got over $55,000 to make a potato salad. The key thing is that you can present your idea, which potential investors may find interesting, useful or at least entertaining. If you can get your Kickstarter campaign to go viral or even generate a moderate amount of buzz then you'll have a greater chance of success.
4. Find a Partner
A lot of people hate this idea because finding a partner (forming a joint venture) means giving up their equity in their own company. Regrettably, sometimes, you don’t have much of a choice. It’s either find someone to run the company with you or put a lock on your dream once and for all. Fortunately, this doesn’t have to be that scary. All you need to do is find someone who shares your vision for the future of the company (at least when it comes to major goals and objectives) and you shouldn’t have a problem.
5. Personal Loans
Finally, if all else fails, you can always turn to your friends and family for help. Asking for a personal loan, however, should not be taken lightly. Sure, they may be lending you the money for personal and not business reasons, but they are still your investors and expect to see their money back. A great number of personal relationships ended over joint business complications or unpaid debts and you should definitely be careful not to let this happen to you.
When it comes to their money, internet strangers, international banks and your relatives are all equally careful, which means you will have to do your share of convincing. Still, while banks and companies only care about the figures, to the rest you will have to demonstrate in which way can your company make their lives better. If you succeed at that, you shouldn’t worry too much about your company’s funding.
Dan Radak is a marketing professional with 10 years experience. He's a coauthor on several websites & regular contributor to BizzMark Blog. Currently, he's working with several digital marketing companies, closely collaborating with e-commerce companies.
I hope you enjoyed this article about some effective methods to raise funding for your lean tech startup.
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