Five Ways To Raise Money To Launch Your Own Startup
While there are tons of obstacles along the road of setting up your own business, raising funds could be the number one cause (after mis-planning, of course) for the failure of your new business venture.
By May Rostom •
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
A lot of entrepreneurs are faced with many challenges when setting up a new business venture, but the most common one? Garnering the right amount of resources and funds necessary to kickstart the business. While there are tons of obstacles along the road of setting up your own business, raising funds could be the number one cause (after mis-planning, of course) for the failure of your new business venture. With that being the case, here are five suggestions on how you could raise money for your new endeavor.
1. ANGEL INVESTORS Seeking an angel network in your community could be a fast track method to launch your own startup. While angel investors can take an equity share of your startup in exchange for their investment, their funding can also be exchanged for convertible debt. More often than not, these "angels" are, or used to be, entrepreneurs themselves. But these angel funds aren't necessarily easy to secure, and they require you to have extreme knowledge of every aspect of the business.
2. CROWDFUNDING The one time we actually get to see the internet being used for a greater good is when powerful crowdfunding pages circulate the World Wide Web. Whether you choose to go on Kickstarter or CrowdFunder, using the resources available to you online could be one of the most powerful tools to raise all the needed funds for your new business venture.
3. PARTNERSHIPS Coupling with a "strategic" partner is never a bad idea. In fact, according to a recent study, over 80% of companies say partnerships are essential to their growth. If they are trustworthy, partners reduce liabilities, breathe fresh air into the business, and offer new perspectives and solutions to all your pressing business needs.
4. BOOTSTRAPPING We've all heard this term before, but some of us may not be quite sure what it means. Bootstrapping is when every single spending decision in your life is commanded by the availability of your funds to push your project forward. Bootstrapping is when you build the company up from scratch with nothing but your personal savings. That means, no more Tuesday night burgers with friends, no more "Darn it, I'll just buy it" decisions, and definitely no more "Hey, what's the worst that could happen?" questions. Bootstrapping means strapping up these cowboy boots for one bumpy ride that is definitely not fit for just anyone.
5. VENTURE CAPITALISTS Startups seeking financial aid often resort to venture capitalists (VC). Unlike angel investors, VC firms invest in the early stages of your company in exchange for an equity share. The money management organizations raise money from various sources, and invest this collective capital into startups, usually within the software and technology sectors. This funding, alongside business advice, networking opportunities, and additional resources, helps startups to grow rapidly and dominate their market.
Related: How To Get The First Investment In Your Idea-Stage MENA Startup
