whatbare the possible different ways of raisingmoney for your venture?
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1. Funding your own idea:
This way of raising funds is the most common among startup’s early stages. Founders or the team members put their money together for their startup. Professional investors in the market prefer this way of raising funds.
You must have some savings or assets that would be used for the business startup. Funding your own startup is one way of telling your potential investors, how serious you are about this venture. Putting your money in the project shows that you are willingly taking the risk of putting the money that you have worked hard for at stake, supporting your idea with the faith you have in your company.Funding your own business has advantages that other ways of raising funds do not have, excluding crowdfunding. If you self-fund your business, you will have control of it in the premium stages besides crowd-funding. If not, then you will have to give out equity shares or take debt, which will have an impact on your baseline.
2. Crowdfunding:
There are various types of crowdfunding. You have to select which one is the best for your business such as rewards or equity-based crowdfunding. It is an excellent way to gather funds for startups with artistic projects or even to raise capital to finance the manufacturing of new technology at a large scale.
Any option you choose this option is of low risk as if you want to put the product in the market and also get funds to finance your product and make it the reality. This is also advantageous to get feedback from the early adopters of your prototypes.
Future investors will be able to see marketplace adoption if you go with crowdfunding, this will help you in different ways. As investors notice other people are willingly investing in your idea, this will persuade them to also put money into it.
To uphold control over the business crowdfunding with rewards is another way. Many business startups select crowdfunding to maintain freedom and avoid censorship.
3. Angel Investors:
Angel investors are quite a bit popular because of ABC’s show, SharkTank. In the entrepreneurial world, it has been prominent to startups as they do not only provide finance to mount their business but also mentorship and experienced guidelines. Generally, Angel investors invest around 1 million, numerous investors come together and provide funding sometimes.
Reaching out to investors is as easy as reaching the right people in the right areas, but only if it is done in the correct way.
4. Friends and Family:
One of the best places to raise funds is from your own house. As your family is well aware of your talents, they will be willing to support you regardless of what you want to do. Family and friends are the only ones who know your potential and will be willing to give you money to start your business.
5. Taking A Loan:
Another way to get your startup financed is a business loan from the bank. It is one way of keeping the initial control of the business in your own hand. Taking a loan for startups might be healthy but only to those who have full confidence that the business will prosper in the first run without difficulties. Again, it depends on you and the type of business you want to incorporate.
But while considering the loan check the interest rates and also if u have collateral to give. Crosscheck with all the facts, whether you are able to comply with all the terms of the loan.
6. Enter Competitions:
For gaining publicity, you can enter competitions if you believe that your idea is capable enough. Entering these contests will be very helpful to you as in one hand if you win the competition you will get a source of finance, and on the other hand, you gain publicity for your product and people will be waiting for it to hit the market (it acts as advertisements).
This is a low-risk option as you get your ideas out in front of investors and if it is good, you can win the competition and get money rewards to finance the startup of your business to succeed. If you are not able to make it and win the cash prize, being on that competition acts as an advert for you and angel investors may contact you to invest in your idea. Both ways it’s a win for you.
7. Venture Capital
One of the other ways to raise funds is venture capital. A venture capitalist invests in large growing markets and new technology. They usually Invest a minimum of $1 million. Not all the venture capital firms participate in investing in startups, they would often prefer to invest at a later funding stage.