Starting a business is an exciting prospect, but things soon become hectic when demand becomes too much for your initial roots to handle. Unfortunately, statistics show that 60% of all startups don’t make it into year four. Therefore, to avoid becoming another statistic, it’s essential to begin planning for financial security early. Luckily, there are many ways to acquire growth capital, and we’ve gathered them together below.
Loans
A business loan might be the first idea to cross your mind, but you’ll need to have been trading for more than two years already to be approved. Your business will also need to demonstrate outstanding credit to be approved, which means having a positive financial track record. Unfortunately, as you’re in the startup phase, you may have had to dip your toes into adverse credit so this likely isn’t the best option.
Venture Capital
As a tech startup, you may be able to attract the attention of a venture capitalist, which will fund your business and help you grow. For example, Parabellum Investments will integrate themselves into your business to help you thrive, as a return on their investment is dependent on your success. This type of funding is great news because you can learn from industry experts, but you may have to come to terms with relenting control of certain aspects of your business.
Crowdfunding
If you have a firm belief that there’s enough demand in the community for your product, you may benefit from exploring crowdfunding. Naturally, having an active social media presence will help you to gauge your chances of success and will allow you to reach your community. If you can build a strong rapport with influencers in your niche, your crowdfunding efforts may be more fruitful than you first believed.
Government Schemes
Governments need technology for several different reasons, and they have revenue set aside to make sure they get what they need. For example, if your tech startup is actively involved with innovative research and development, you may be able to apply for government-backed funding.
Loved Ones
Nobody wants to feel like a financial burden to their loved ones, but sometimes there’s no other option available – this is your business, after all. Approach your family member or friend as you would any other professional, and lay down all of the facts in front of them to demonstrate that you’ve put time into researching the value of a loan. Before allowing them to make a decision, make sure they understand that this is a loan and that they will be paid back in full (plus interest).
Bootstrapping
If all else fails or you’ve only just launched your business, you’re going to have to stretch your pockets and come up with the money yourself. This is called bootstrapping, and it involves taking necessary actions like selling possessions and completing tasks for other businesses in a bid to make money. Although this isn’t a long-term strategy, it’ll keep your business afloat until revenue trickles in.
Business growth relies on additional funding, which isn’t always available to startup businesses. The financial sources outlined above all have the potential to grant the required revenue.
