10 Clever Ways to Raise Money for Your New Startup

1. Crowd Funding

It gets its name from the fact that the public funds your project using their own personal funds. You can take help of websites for that and let people decide the rest. Most of the websites currently use a reward-based system where investors are given some sort of reward.

2. Angel Investing

Angel investors are the entrepreneurs who have made fortune and are now looking for new start-ups to invest in. Some of the world’s largest businesses, such as Google, Facebook, Skype, and Twitter have developed due to angel investing.

3. Family and Friends

A number of successful businesses have started out with loans from family and friends. However, make sure your business doesn’t strain the relationships and beware of pitfalls that knock up during turbulent times.

4. Credit Cards

Credit cards can be viewed as temporary measure between getting your business started and obtaining other financing, such as availing loans, etc. They can be used when there is no other option available.

5. Bank Financing

This is one of the most popular and tried-and-tested methods for financing your new venture. Your banker may insist that you have your loan guaranteed by the Small Business Association (SBA) before approval. You can also offer some other form of security to get your loan approved.

6. Second Mortgage

These are also known as home equity lines of credit. These loans tap into the locked equity you have in your home. To calculate how much you can borrow – take the value of your home, and deduct the value of any outstanding mortgage. This is how much your second mortgage would be worth. Another advantage of second mortgage is that interest rates tend to be lower than other forms of financing.

7. Venture Capital

Venture capitalists invest in start-up businesses which have a high growth potential. Traditionally, they received equity in the business in exchange of funding it. Nowadays, they demand a mixture of equity and debt financing.

8. Business Partner

Maybe you don’t have the money to start-up a new business, but you know somebody who does. So, be on a lookout for any such opportunities. However, when selecting a business partner, make sure your business goals are aligned with each other and understand if both of you are on the same page.

9. Take Help of Social Media

With social websites going wide, you can reach a large number of people. Use this to your advantage and reach out to potential customers and investors.

10. Make Contacts

Make contacts and reach out to influential people who might be willing to help. This will give your business a boost.