All new businesses, including tech startups, have to worry about funding as they start out. A lot of people have amazing business ideas that will never be actualized due to a lack of funding. A startup is not an easy thing so you need to be completely determined and dedicated.
You should understand your current reality and why only half of the startups in the U.S last 5 years. Out of that number, only 30% will last 10 years. It’s a sign that your chances of failing with a startup are higher than succeeding. Therefore, you need to be more focused and determined in getting the funding you need for your business.
Here are some useful tips to consider when looking for funding for your startup tech business.
- Create An Excellent Business Plan
Before anyone invests in your business, they want to see what they can gain from it. You should have financial projections for your business since this will be the bait for your potential investors. A business plan will also show the investors how your business will run, your identity and what your business will offer the market.
Your business plan should have a detailed analysis of your market. You should highlight the various gaps that your competitors have overlooked and how you will fill them. Make sure there is an open organizational structure in your business plan that details various roles and responsibilities for the business stakeholders.
- Get Help From Your Friends And Family
Your friends and family can also provide funding for your business. They might be open to investing in your dream business and willingly provide the funds you need as well as some advice. Funds from your friends and family will come with little to no interest and cash flow will be easier for your business. However, there is a huge risk that your relationship with these people will suffer if you rely on their funds but don’t provide a return.
Over the last few years, crowdfunding has become a great source of funds for a lot of startups. You can try out various crowdfunding websites that focus on startups such as the following.
If you connect with the right investors on these sites, you will be in luck because they are looking for the next best business to invest in. Make sure you use a popular crowdfunding platform because your business will be noticed by people who are actually looking to invest. Are you feeling a little skeptical about using crowdfunding? You should know that a lot of big businesses started out here.
- Contact Angel Investors
All businesses often go through various funding stages. For instance, startups move from Series A funding to Series B and C whenever required. In the first round of funding, an angel investor is very important. The investment will often be indebted and there is much more to it than the capital.
Angel investors are usually more involved in the initial stages of your business and will offer the guidance that you need. After this stage, you will be on your own. In most cases, angel investors operate on their own or are part of a committee.
- Try The Local Bank Or An Online Lender
Do you have a good relationship with your local bank? If yes, you have a good chance of getting a loan. When applying for your loan, provide your business plan and presentation. Approach this loan with a lot of professionalism. If the bank rejects your loan, you must not stop looking for funding.
Rather, you can turn to other online lenders. For instance, you can try out the US Business Funding and Lending Club Business Loans. These lenders will give you loans that you need to get your business up and running. Here is a good list of the pros and cons from Askanydifference
Some startup businesses are eligible for government grants. Take a look at USGrants and find out more about the options available to you.
- Fund It Yourself
Do you have enough money saved away? You can easily transfer it to your business. A good advantage of this is that you will not be reliant on other people who might be interested in your company. However, it might be risky especially if you lose everything when the venture fails.
Numerous successful companies started out as partnerships. The right partners can provide solutions and ideas to your venture as they share the liability and finding somewhere with low tax rates is a great plus according to Pilota Asia. Take a look at this company incorporation service in Singapore to get you started. Even better, you can share the profits according to the profit ratio.