No one doubts that cash is king, but it’s the scarcity of his royal highness that dooms many potentially great businesses before they can begin to realize their potential. It can be challenging to secure funding when your startup is new, but it’s not impossible. Here are four options:
This is simultaneously the easiest and most challenging way to infuse capital into your startup. Easy because you aren’t relying on anyone beside yourself. Hard because it requires you to dip into your personal finances.
If you’re going to bootstrap, one option is to build your startup on the side while you’re employed elsewhere. The excess from your current salary should be deposited into a fund you’ll use to grow your business once you decide to pursue it full time. You can also bootstrap your business using credit cards, personal loans, or a personal line of credit.
- Debt financing
Generally, banks want to see that you have been in business for at least two years and can turn a profit before loaning you money.
So, you’ll have to get creative if you take this option. Turn to friends and family to see if they’d be interested in offering a low-interest loan. Get everything in writing
and treat these loans the same way you would treat any other business loan. You can also look into alternative lenders that can help with working capital. Just make sure you are comfortable with their terms, since many are aggressive and their terms end up costing you much more than they’re worth.
- Venture capital
Many startups have the goal of getting venture capital (VC) backing. Keep in mind, however, that with VC funding, you will have to give up some equity in exchange for a cash infusion. On the positive side, VCs can also provide mentorship and open doors to new clients and opportunities.
It’s not easy to convince VCs to invest in a company. You will need to demonstrate that your idea can earn them a high return and that the company has a scalable business model. Having a partner to help you through this process can be invaluable and allow you to get funding faster.
- TAP Financial Partners
We know it can be challenging to get funding for your startup, no matter how solid your business plan is. That’s why we offer small businesses capital assistance that includes access to bridge loans that provide interim capital and immediate assets that help facilitate the move toward next-stage financing.
We work with clients as both an equity and debt partner, which means we’re here to help prepare financials and projections, do market research, and develop strategic plans to ensure your company’s value proposition appeals to our pool of vetted investors that are part of the TAP ecosystem.
To gain valuable insight that can help you access the capital you need for your startup, contact us.