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Top 9 ways to fund your start-up



One common problem that all start-ups face is: Where do I find the money to get my business off the ground? Well, there isn’t one simple answer to this question as there are several ways of creating money for your business and getting you started. Below, we are listing the 9 most common sources of business funding today:

  1. Seek a bank loan – this is the most traditional way of getting funds for your business. The disadvantage is that you always have to pay back more than you initially got. Also, you need to have a pretty good credit history to qualify.
  1. Join a start-up accelerator. This is a very popular thing to do at the moment. Start-up accelerators usually provide free office space and consulting but some of them also offer cash prizes and rewards such as Mass Challenge and Entrepreneurial Spark.
  1. Approach a VC. VCs are professional investors on the lookout for start-ups with a proven business model that are ready to scale. They look for big opportunities with a keen and dedicated team.
  1. Find an Angel investor. Angels are usually high-net-worth individuals interested in supporting start-ups. In the UK, Angel investors can benefit from tax reliefs such as SEIS and EIS, so this is a relatively low risk investment for them.
  1. Run a crowdfunding campaign. Crowdfunding became one of the most popular ways of funding new business ideas. Sites like Seedrs or Crowdcube are popular choices for equity-crowdfunding in the UK, whilst Kickstarter and Indiegogo are great choices for funding product based ventures.
  1. Seek small business grant opportunities. Every year, the government allocates funds to support ventures that come up with new technologies or support important causes such as education, medicine or social needs.
  1. Friends and Family. As a general rule, professional investors would expect a qualified start-up to have raised some money through their family and friends to show credibility (crowdfunding is a useful way to do this). If you have support from your family and friends, outsiders will be more likely to join in too. This is the most popular source of funding for very early stage start-ups.
  1. Skill swap. The likelihood is that you have a skill that some other start-up needs. Ask around within your business circle and see if you can swap your sales or IT skills for free accounting or legal help.
  1. Currently, the cost to start a business isn’t high and there are plenty of free tools and resources that you can use to get you going. It might take a bit longer but at least you don’t need to go into debt or sell any equity.

There is no one best way to source funding for your start-up. Choose a combination that feels right for you and your business. Here at IdeaSquares, we believe in crowdfunding and have successfully completed 3 equity-crowdfunding rounds ourselves. Now, we use our expertise to help start-ups such as yours to get funded.


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This entry was posted on November 16, 2015 by in Crowdfunding, Entrepreneurs, Generating Ideas, IdeaSquares, Marketing, Spotlight, Startups.
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