8 Techniques to Finance Your Startup

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8 Techniques to finance your Startup

Surely you already know the Crowdfunding, although there are many other formulas to finance your startup.

Anyone who wants to start a business should have the help of banks. This statement was true a few years ago, but now, thanks to new technologies, you can find a wide variety of formulas to finance your startup, even if you are self-employed, freelance and entrepreneur. 

This, the financing of the startup, is the biggest problem that anyone who wants to start a project, an idea or a company must face. Normally, these entrepreneurs start by pulling their savings, also borrowing money from family and friends. However, you may be able to attract some private investor or get some government help.

startup

Do not despair and keep reading the 8 financing techniques which we highlight below. Think that not all will be optimal for your startup, but you will have to choose the one that best suits your idea and your possibilities for expansion:

Financing techniques for Startup

1. The Three F’s

This term refers to “family, friends, and fools“, those people who will lend you their money to undertake even having no business idea. In fact, family and friends represent the main source of funding for startups.

2. Crowdfunding

This technique, quite novel, is based on collective financing. It is a way to search for “partners or investors” through the Net. You can use the reward crowdfunding (the sponsor receives a counter-benefit), the investment (the investor obtains shares or business shares), the loan (the receiver must return the money with an interest rate) or the donation (the donor receives nothing in return).

3. Angel Investors

This is how philanthropists are known to invest their money in companies or people who believe they will succeed in the future. Normally these become partners or receive a certain number of shares, which usually generate benefits after approximately 5 years. When these angels invest in a group, it is known as a co-investment led.

4. Bank loans

It is true that the current scenario is quite complicated, but banks still grant loans to entrepreneurs with good ideas. Of course, you will need a good business plan to convince them.

5. Venture Capital

Also known as venture capital, are the private funds that usually invest in projects already consolidated in order to achieve an economic return.

6. Seed accelerator

This is the institution responsible for promoting various startups through a system of mentoring, training, digital education and financing. When the company is ready to launch, this organization calls a public pitch.

7. Bartering

With this term we are referring to the traditional barter system. Although it is not a form of direct financing, it helps reduce costs. Why not lend your computer services to a communication company in exchange for your social networks?

8. Bootstrapping

The most intrepid entrepreneurs will be able to carry out this practice, which basically refers to the fact of starting an activity with the capital that only you have. You can be more autonomous, creative and thrifty, although the chances of success are smaller.


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