How to raise capital for your startup

business funding

If you’re in the early stages of a startup, you know that finances are tight.

If cash flow is slow in the early stages of your business, then it absolutely makes sense for you to raise some capital to pad your finances and get your company up and running.

ere are three ways to raise capital for your startup.

Take out a small business loan

Max Funding found“over 80% of consumers are dreaming about owning their own business. However, the first challenge for new business owners is lack of funding. Typically business owners don’t have enough business experience and cannot get loans from mainstream banks and lenders.”

Your startup may benefit from a small business loan, which is a form of debt financing frequently used by small businesses and startups. If you independently own and operate your business, and have fewer than 500 employees and less that $7 million in sales, then you qualify for a small business loan. 

Small business loans are a highly critical source of funding in today’s economy, and without them, many businesses would cease to exist. If you want your small business to make it past the dreaded five-year lifespan, then a small business loan may be just what you need to get going. 

Find an angel investor

This can be tough to do, but one of the most lucrative capital-sourcing options for startups – an angel investor is a person who invests in a new or small business venture, providing capital for start-up or expansion.

Angel investors are typically very wealthy people, and usually owners of other businesses or assets, who are looking to diversify their portfolios. An angel investor is great for getting a large sum of money to your business quickly, but you should know that the return rate is significant. Most angel investors typically look for a return of 25 percent or more.

Establish a board of investors

Another way that’s similar to an angel investor for raising capital for your startup is establishing a board of investors, instead of just one person. Having a small group of people who are willing to invest in your business may be more of a high stakes play than a singular angel investor, but it also helps to diversify and spread the risk and assets amongst more than one person, which can be a safer business move.

Set up a GoFundMe account

If you’re seriously bootstrapping in the early stages of your business, consider using a crowdsourcing platform to help you raise money for your venture. Especially if your business is wellness-focused, or involves any sort of brand new product or technology, it’s more likely that the public will rally behind it and be willing to contribute to your cause.

These types of funding platforms are typically very easy to set up, and can really take off with the right mix of publicity, effort, and sharing. Look into a GoFundMe or other public funding platform for a creating way to raise capital for your startup or small business.

There are many ways to raise money and capital for your startup – you just have to find the one that works best for you, and your unique business’ needs. Get started with a small business loan or other funding source today.