Six Easy Ways to Raise Capital For Your Business
Six Easy Ways to Raise Capital For Your Business

For starting a business organisation successfully takes meticulous preparation, planning and hard work. The most important thing more than all these aspects is the robust financing source. For growing up and taking it in to the line of success, it is very essential for attracting financers like venture capital sources, banks, venture angels, outside investors and many more. Capital Raising, no matter it is from any business angel, financial institution or any firm of venture capital, has got so much things to do for selling the ideas of your business. You have to remember that only great business idea is not able to take you to your goals. If you get failure in pursuing potential investors for investment and capability as an owner of business then you will not be able to get success for sure. For success you need to achieve both of them.

Starting Your New Business Organisation

In fact, it is very hard to find the capital providers and it is harder to make them convince for your business ideas. The main thing is that capital is so much important for envisaging a new business organisation’s operation and for arriving at that point where external investors can feel and notice the growth of your new organisation. Through this they will be able to understand the individual obstacles of finance.

This process can be a very rocky path for following because it is very tough to use any one’s assets for any new comer company or organisation. The only thing which is important is that how will you be able to seed your money for uplifting your company. Your company is your creation and your idea so you have to do such things so that investors can attract towards your organisation.

For all this process you have to make sure to do such things like preparation of your business plan, preparation of a list of probable investors, development of contacts based on your prepared list, respond to the request of any investor and in the last negotiation of the transaction. Through this way you will be able to make your path easy.It is very apparent that resources are the most critical facet for any company no issue it is recognized or developing.

Six Easy Ways to Raise Capital For Your Business

While money doesn’t grow on trees, there are a number of ways you can seek funding for your business—some more traditional than others.

Here are six ways you can raise the money you need to expand your business.

1. Bootstrap your business

Provided that your business isn’t operating in an industry that requires lots of startup capital, like manufacturing or transportation, you can potentially fund your own venture—and it may be more feasible than you think.

For instance, even if you don’t have enough in savings to run the operation, you could get a 0% / low interest APR business credit card, offering you the chance to borrow cash for a period of time without incurring interest.

Investing some of your own money will usually make investors and lenders more willing to partner with you down the line.

2. Launch a crowdfunding campaign

There are many crowdfunding success stories out there. And with the right product and pitch, you can be one of them.

Crowdfunding gives you the opportunity to connect with like-minded people who you wouldn’t normally be able to engage. You can gauge interest in your product and understand what’s resonating with people and what’s not. This shows you how to improve your product and your pitch. Most importantly, crowdfunding can help you raise money to fund your business.

So, how do you launch a successful crowdfunding campaign to raise capital for your business?

Your video pitch must show the value of your product, the need it serves, and why you require support. Having a good website and doing PR outreach helps as well.

3. Apply for a loan

Even as technology creates new ways of raising capital, traditional financing products remain the primary way small businesses fund their operations. According to the Small Business Administration (SBA), almost 75% of financing for new firms comes from business loans, credit cards, and lines of credit.

enerally speaking, the small business loans with the most favorable rates and terms are going to be SBA loans and term loans from banks and other financial institutions. To get approved, you typically need to meet requirements like the following:

  • You have been in business for 2 years or more
  • The business has strong annual revenues (typically at least $100,000)
  • Good credit (like a score of 640+)

Before applying for a small business loan, make sure to prepare any loan documents you’ll need to show ahead of time. You’ll be asked to show a profit and loss statement, balance sheets, tax returns and bank statements. In some cases your personal information may be checked as well.

4. Raise capital by asking friends and family

Raising capital through friends and family is a viable option for many. According to the Global Entrepreneurship Monitor, 5% of US adults have invested in a company started by someone they know.

Once you’ve done that, Beesley stresses that you must demonstrate passion and due diligence by having a sound business plan and direction. Also, be realistic about how much money is needed.

Finally, make sure to agree on what form the funding will take. They could be a loan or equity in your company. If the money is a loan, agree to a repayment plan and use a P2P lending website to document everything and manage the loan.

5. Find an angel investor

By definition, angel investors are accredited individuals with a net worth exceeding $1 million or annual income of more than $200,000. They typically operate alone, but may team up with other angel investors and form a fund.

You may be wondering how you find angel investors. This might seem difficult, but many resources exist.

6. Get investment from venture capitalists

Venture capitalists (VCs) typically want to invest in slightly more mature companies than angel investors and sometimes want to have more of a say in managing the day-to-day operations.

Since VCs have a responsibility to achieve certain returns for the firm or fund, they want scalable and cash-flow positive companies with proven and scalable products and businesses.

If your company satisfies these requirements, you could apply for an investment with a VC firm. It’s not the easiest thing to accomplish, but plenty of small businesses have done it successfully.

Get the capital you need to drive forward

The key lesson here is that you have many options for financing your business. Don’t get discouraged if one doesn’t work out. By demonstrating due diligence and being resourceful and persistent, you can raise the capital you need.

Then, money will no longer hold back your business. You’ll be free to expand.

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