Every startup needs money, especially in the early days of your business. There are loads of expenses in the startup world, including marketing, advertising, operations, and personnel. But you don’t need to rely solely on traditional bank loans for capital. Here are a few creative ways to fund your startup outside of a traditional bank loan.
Family and friends
Don’t discount your personal network along the road to entrepreneurship. These are the people closest to you, who believe in your and want to see you succeed. They won’t care as much about proven revenue, business plans, or other hard assets that traditional lenders require. However, you should still treat family and friend loans as true business loans. Write everything down in “paperwork” and include promissory notes and a date of payback to keep it legitimate.
Crowdfunding used to only be used by non-profits, but it has gained widespread popularity in recent years. In today’s digital age, crowdfunding is more popular than ever, thanks to websites like GoFundMe. Leverage your online and social media presence to promote a crowdfunding page to help you raise money for your business. Find pockets of like-minded people online who will believe in and support your business idea, and show their support through small dollar contributions. A perk of crowdfunding is that it isn’t a loan – it’s truly a donation. Although you should include some sort of promise of how you will be using the money, and how contributors can expect to see their donation “pay off.”
If you have a knack for personal investing, then you may want to pursue this route for raising capital for your startup. You can invest traditionally, through stocks and bonds, or you can choose something more unique, such as Bitcoin. Bitcoin is growing in popularity and awareness, and if you know how to invest properly, you can stand to make a lot of money. There are many places that you can get started with Bitcoin, you can Buy Bitcoin in Canada or through the help of another professional organization.
However, there’s a fine line that you need to be aware of in investing your startup’s money. Never gamble on core finances of the company. With this funding approach, you need to be willing to invest your own dollars for the purpose of long-term growth and earnings.
Another option for raising capital for your startup is peer-to-peer lending. Peer-to-peer lending is the process through which a group of people comes together to lend money to each other. This is a process that’s been around for many years, but has gained popularity recently in mastermind circles and business networking groups. If you want to pursue this type of funding, look for a successful entrepreneur peer in your field who is willing to fund similar new ideas.
When it comes to funding your startup, there’s no shortage of creative options you can pursue. Just be smart about your investments, and constantly be thinking about long-term gains, and not short-term benefits.