Clever Ways To Raise Funds

Posted on March 9, 2018 by ah! Ventures

The basic question that comes to one’s mind while thinking of starting a business is “How do I raise funds?” Fund-raising refers to the gathering of monetary resources through people’s contributions. It can be raised at either the private or the public level. The literal meaning of FUND-RAISING is the “seeking of financial support for a charity, cause or other enterprise.” It can also be defined as the “process of gathering voluntary contributions of money or other resources, by requesting donations from individuals, businesses, charitable foundations, or governmental agencies.”

Any person would tell you that raising funds for starting your own business can be one of the hardest and toughest jobs in life. Fund-raising has become a competition now and the chances of keeping your investors to yourself safe and secure is slimming day by day due to increase in the number of businesses. It is not impossible to find an investor, but what must you do if you can’t find one? In that case, you need to look out for alternatives that will further contribute to your financial success.

  1. Start with your own capital first
    If you yourself are not ready to invest your own savings or home equity into your business, no person would contribute to raise funds for your startup. The business environment is an unpredictable and uncertain one. Yes, there is high risk involved but what is a business if no risks are taken? Higher the risk taken, higher is the expectancy of results.
  2. Public-raised funds
    For you to make it possible to be able to raise funds by the public, you need to propose your business idea first. Accordingly, the public chooses how little or how much they want to invest in your startup. The project is funded by the public according to their will by their personal funds.
  3. Getting financed by the bank
    This is one of the most common ways to raise capital for your startup. For getting a loan from the bank, you need to keep a mortgage as security, such as the documents of your house or your car or ornaments having high value after your loan is approved and sanctioned by the bank. The mortgage is always more than the loan provided by the bank.
  4. Selecting a business partner
    If you feel like you are not able to raise sufficient funds for your startup yourself, converting your sole proprietorship to a partnership is something that needs to be given a thought. Such a partner must be brought into partnership who is able to invest maximum funds into the business.
  5. Venture capital
    Venture capital is a type of private equity. It is a form of financing which is provided by firms or funds to startups or businesses at the early stage. The returns of the venture capital is dependent on the growth of the business.
  6. Angel investing
    Angel investing is the exact opposite of venture capital. It consists of an individual investor who invests his or own money in an entrepreneurial company. It is done for exchange of funds with ownership equity or convertible debt.

So, how are you attempting to raise funds for you startup? Be sure to analyse the business environment first because it keeps changing before you choose a method to initiate fund raising for your startup.

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