Startup Financing Options

 

Once you do have revenue then there are more options as we will mention below.

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There are ways to go about getting the funding you need but you need to be creative and exhaust all of your resources at your disposal.

 

Consider many sources for your startup funds:

 

1. Use your own finances. Obviously you should consider your own funds first. Instead of getting a loan or borrowing from others, see if you can finance your startup with funds you save or gather.

 

• Do you have savings that can be used to fund your new business?

• Do you have items or services you can sell to raise money? This may take a while, but you might feel more comfortable delaying the launch of your company a bit while you earn the money to get it started.

 

 

2. Ask friends and family to help. Do your family and friends think that the startup idea is a good investment that will bring high returns? If you have support from these sources, they might be interested in loaning you the startup funds or investing in your new business.

 

• Your friends or family members can become lenders, partners, or investors in the startup.

• They can contribute to the financial side, but they may also want to be involved in other areas. It's important to negotiate an arrangement that you feel comfortable with.

 

3. Use crowdfunding sites. There are multiple online crowdfunding platforms, such as Seedinvest, Kickstarter, Indiegogo, Start Engine and others, that can help you raise money. These websites let you share your startup idea with the public.

Then, the public can donate money in return for items, services, or a share in the company,

 

• One key to success on a crowdfunding platform is to have a unique story.

• You can raise money for your startup and introduce your product or service at the same time.

• Keep in mind that these platforms are filled with competitors, and it's not easy to get all the funding you need. A successful campaign on these platforms usually includes social media and marketing efforts.

 

4. Enter startup contests. Big brands and investors sometimes have contests for startups. These contests put you in front of big names who are interested in investing.

 

• They help you get recognition while you learn from other startups. You also have the chance to fine-tune your ideas to make them more appealing to investors.

 

 

5. Seek angel investors. Angel investors want to help new companies and make a profit in the long term. They have vast sums of money, so your startup may be able to get all of its funding in one area.

 

• Angel investors tend to ask for a portion of your company or shares. They may ask to be partners or have control over startup decisions.

• Because of their financial commitment, they have a vested interest in your success and want to ensure that your new business brings in high returns.

  • LAUNCHfn- ​is directly connected to The National Network of Angel Investors. Forged from the legacy of NBAI, once considered the most active angel group in the Southeast and named by Inc Magazine as one of the top 50 angel investor networks in the United States of America. 

 

 

 

 

6. Consider venture capital and financial institutions. Venture Capital, banks, credit unions, and other institutions may offer you a business or personal loan to fund your pre-revenue business or idea. They may require collateral and will ask for detailed financial records and other information about the startup so be prepared.

 

• Small business loans are a popular choice among startups that have revenue so once you are generating revenue then you can seek these types of institutions. Here are a few different options in the market:

  • Capchase - Grow with working capital. Capchase is the most-trusted finance partner for Saas.

    • Take the funds you need, when you need them – no penalties or fees – from $25k to $10M.

    • Capchase will provide flexible, non-dilutive financing to founders. 

    • From sign-up to funds wired to your bank account in as little as 48 hours​​

    • No hidden fees, warrants, covenants, or security interest. A discount fee
      ‍as low as 5%

    • Invest in your business to reach a higher valuation at your next round with no dilution

    • Scale customer acquisition cost spend without worrying about cash flow limitations. Whatever your payback period–recover CAC instantly.

  • Pipe - transforms recurring revenue into up-front capital for growth without dilution or restrictive debt. Pipe makes recurring revenue streams tradable for their annual value, meaning more cash flow for scaling companies. No customer discounts, no restrictive debt, no dilution.

    • One click, instant payout.

    • Connect to Pipe and convert your revenue streams into up-front capital with the click of a button.​

    • Get the capital you need, when you need it without offering discounts or disrupting your customers' experience.​

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• For Venture Capital firms, here are a few notable companies:

  • Lighter Capital​

  • Kinetic Ventures

  • Accel

  • Andreessen Horowitz

  • Sequoia Capital

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Building a startup is an exciting time!

Follow a profitable business plan, business model, or lean canvas, and keep your eye on every dollar spent so your new business can repay the startup funds as soon as possible and move on to earning the maximum returns possible.