Tag Archives: how to raise capital

How to Raise Capital for Your Startup Business?

Starters usually give up the equity shares to generate the startup capital. But if you want a quick move then it’s better to avoid traditional equity-based funding models.

Lets’ have a look at some of good alternative options that can support your fundraising capitals.

Friends and Family

No, we’re not asking you to run a business with your family or friends. But what’s wrong in borrowing some money?

For the startups who really can’t afford bank loans, asking your close buddies and family to make few investments seems a lucrative option.

Moreover, the support of friends and family is a valuable asset as they will not just invest their money in your startup business but also give you some guidelines to handle risks. So, they are like your strongest back support that will not leave you even during the adverse times.

Group of Indian people holding banners with $ symbols.

But you need to be a little cautious because generally people tend to control a part of your business if they make some investments. So, make sure you don’t mix money and relationships.

SBA Loans

The Small Business Administration (SBA) is a government entity that gives financial support to small businesses in the US in the form of loans and grants. The good thing is you can loan from them without diluting your shares and they offer mentorship programs.

Since this is a government based funding option, therefore you may have to fulfill their specific requirements.

sba-loan

Time is the biggest consideration while considering a loan from SBA. Sometimes it can also take up to six months for loan approval; therefore you should start with the procedure beforehand.

Bootstrapping

Another option to raise capital for your business is by bootstrapping. This is for the ones who are not able to convince investors or generate revenue from other options.

Since you cannot always wait for the perfect funding option therefore bootstrapping your business is the perfect idea.

Bootstrapping

One good thing about bootstrapping is you don’t have to impress the investors about the company’s growth levels.

Grants

This option is ignored by most of the people. Government and private sector grants are one of the best options to raise capital for your startup business. They don’t require any equity to obtain and you don’t even need to pay them back.

You just need to find the right funding option for your business, beyond that you just have to fulfill the requirements of the application. Private sector grants may seem easy to find but it’s difficult to get approved.

Government grants are available are not available throughout the year and they also have a long application process. So, you need to start on time.