One of the biggest headaches for startup founders is finding sufficient funding to get the company off the ground and to keep it running. It’s an issue that many startup founders would rather not deal with in order to focus on the business at hand, but in the real world, every company needs liquidity to pay for the most basic expenses. And if you’ve somehow figured out a way to start and run a company without any money, you should probably patent the idea and sell it as a business in and of itself. Barring your miraculous discovery of this method, here are 5 ways you can get your startup the funding it needs while developing your business at the same time.
1) Pitch Friends & Family
The reason for pitching friends & family is two-fold. Not only can they potentially pony up some capital for your startup, but they also provide you with a friendly audience for refining your business pitch. If you can’t explain your business model to your friends & family, you already know there’s a lot more work that needs to be done before you talk to professional investors.
2) Track Down Business Competitions
When you enter business competitions, you will be forced to continually refine your business plan and pitch for an audience of judges. Even if you don’t win every competition you enter, the efforts that go into it will pay off in the long run.
3) Keep Your Day Job
Unless you have to work 24 hours a day, it’s likely feasible that you can keep your day job at least for the beginning phases of your startup. Keeping your day job will at least give you some capital to work with on the lower costs including website maintenance and various office overhead costs like business cards.
4) Think About the Next Phase of Funding
Even while you are working on the immediate capital raise, you as the founder need to be worried about the next phase of the capital raise. While you are working on the current capital raise, it’s important to keep your eye on the next stage so that you don’t fall short of your immediate requirements and have a complete story to tell your current potential investors.
5) Start Preparing Your Company for Crowdinvesting/Equity Crowdfunding
As you may have seen in the media recently, investment crowdfunding will be a new capital formation method that’s anticipated to become effective later in 2013. It’s different from the crowdfunding you have seen to date, so you should do some research and prepare for the materials that you are going to need in order to raise capital with portals such as Return on Change.
By Sang Lee