How To Raise Money For Your Amazing Start-Up Idea

how to raise money start-up ideas crowdfunding capital vc

Do you think you have the perfect business idea that could see you rocket to success? Are you just waiting for an angel investor or dream lottery winnings to give you the cash injection you need to get things rolling? You’re not alone. 

Raising the initial seed capital and funds can be one of the most difficult endeavors of any new enterprise, but the one thing you can be sure of is that the money won’t just fall into your lap. Like everything else in the world of business, you need to take proactive, positive action and most importantly, get out there and graft! 

Here are a few of the best ways to approach raising the capital you need to get your idea off the ground. 

Network 

Far too many new entrepreneurs underestimate the value of simply getting your name out there. Attending industry events, mixers and launches can be a great way to build some recognition in your field without having to necessarily have the goods to back it up. 

Networking events will often consist of simple chit-chat and introductions, so you don’t need to worry about preparing a portfolio of work to show off and you can leave your business plan at home. If you are prepared to discuss your ideas and existing experience, while showing interest in others (a lot of people forget this too!), you will do wonders for your image. 

Once people in your sector can start to attach your name to your face, when it comes time to make funding pitches or to approach others for collaboration, you’ll already have your foot in the door. As much as waiting for an angel investor is not a realistic plan for the majority of entrepreneurs, it is even less likely to happen if nobody knows who you are!

Invest Your Own Money 

The sad reality of business is that, yes, you will have to dig into your own pockets to fund your enterprise at some point. For most, it is unwise to launch entirely based on your own investment and financial backing. New businesses can rapidly become a money pit and it is not uncommon for new start-ups to operate at a loss for some time. 

However, investing in resources to help you gain capital from other sources can be a good idea. Whether that is building a prototype, establishing a network or soft launching with a limited run, these can all help to make your business more attractive to other investors. Of course, when it comes to pitching, it can be much easier for a prospective investor to share your vision if they can see or touch it. Investing your own capital can come in a variety of forms – it does not necessarily mean saving a large pot. 

Factor Your Enterprise Into The Budget

If you can afford to spend x amount of your income working on your project, then do so. There are a variety of budgeting apps and programs that can help you to balance out your incoming and outgoing. 

Invest Your Money Once You Have Saved it

Investing in the stock market is always a risky prospect, but it can help you to build a return on your savings that wouldn’t be there otherwise. Effective use of ISAs, investment schemes and saving plans can help to build your initial capital into a more formidable sum. Make sure to do your research and read reviews and company profiles to make sure the company fits your goals. Most reputable companies, such as Scottish Friendly, are on review sites, so you can read up on other people’s experiences. 

Approach Venture Capitalists 

Once you have something to show off, or if you think your idea is that good, you can begin to approach VCs in the hope of enticing investment. 

Investment from Venture Capitalists will involve offering a percentage of your business for their cash injection, while it can be difficult try not to be too precious about this. Of course, this is your baby, but without the financial support VCs offer, it is unlikely to grow at all. On top of offering the capital you need; venture capitalists can also provide access to their network and links within the industry that may have been beyond you before. 

Finding Venture Capitalists does not have to mean going on Dragon’s Den. Platforms like Seedrs can be a simple way to reach large numbers of potential VCs. On a smaller personalied scale (no generic pitches), email campaigns, online networking and attending events can be the best ways to make inroads. 

Apply For Relevant Grants & Schemes 

If your business idea is on the cutting edge of technology, or if it lines up with positive societal change, there are likely to be lots of potential grants and schemes out there that you can pitch for. 

Groups like Innovate UK from the British Government can be a great resource for finding what grants you might qualify for and how to apply. Applying for a grant may seem intimidating, but it can be best to think of them as being much like any other investing partner. You will often have to fulfill certain requirements to access and continue receiving the grant, much like a VC would require a percentage of your business and profit milestones. 

Crowd Funding 

While its initial buzz may have died down a little, crowd funding remains an attractive opportunity for start-ups – particularly if you have an easily communicated idea. Crowd funding sites likes IndieGoGo, Kickstarter, GoFundMe etc. can all be great resources for pulling in capital to help your business get started. 

While some of these sites may be geared towards raising a lump sum for completion of a project, others, like Patreon, can be a good source of gradual income and can help you to develop a strong relationship with your customers. Paired with diverting some of your own income, this can be a particularly good strategy for raising the capital needed to flesh out your idea in order to pitch to other investors. 

Conclusion

While not an exhaustive list, this covers some of the main options that are available to you when you’re looking to raise capital for your start-up idea. So, what are you waiting for? Get out there, graft, save and impress!

Bootstrap Business Blog Newest Posts From Mike Schiemer, Guest Posts, & Blog Outreach Services