Funding is the lifeblood of any startup. It allows you to grow and scale your business, which is key to making it successful. In this blog, you will discover the best ways to get funding for startup which doesn’t involve Friends and family, Venture Capitalists and Banks.
Funding can come from multiple sources – some of them you already know about, such as family, friends, Banks, and venture capital funds. Working with venture capital funds ensures you get access to the pool of capital for your startup’s existence. But reaching there can take time. You can also use other alternative methods.
Before learning about the best places to get funding for startup, let’s talk about things to do before stepping towards fundraising.
List of Contents
- Bootstrapping is the first step
- Avoid Bank loans hurdles
- Things to do before going for fundraising for your Startup
- 4 ways to get first funding for your Startup business
- Accelerators and Incubators
Bootstrapping is the first step
Bootstrapping is the first step in starting your own business. It allows you to make all the decisions about how and where your money will be spent and improves your money management ability which is an essential skill for any entrepreneur. Bootstrapping allows a Startup founder to establish feet before get funding for a startup from investors.
The self-funding stage allows a Startup Founder to be experimental, understand the market without being accountable and keep track of how much money comes in and out of your company.
Self-funding teaches you how to manage money more efficiently than conventional methods. Big brands like Apple, Amazon, and HP started their entrepreneurial journey by bootstrapping themselves until they were ready to pitch investors their ideas.
Avoid Bank loans hurdles
Traditionally, best places to get funding for startup included Banks, but modern times offer much better options to get funding for a startup.
Getting a bank loan approved for Startup funding can take months. How long it takes depends on the type of business you’re trying to start and how much your startup is worth (if you don’t have any data about that, try looking up what other companies in your industry are worth).
If a bank approves your loan request, they’ll want to see all sorts of paperwork—from proof of earnings statements and tax returns to financial statements from other sources like personal loans or credit card accounts that aren’t associated with the company’s finances (like student loans). You’ll also have to provide proof of insurance coverage so they know that if something were to happen during their funding cycle, there would be someone who could cover any losses associated with it. This may seem entirely unnecessary if everything goes according to plan; however, if something goes wrong during this period due to some unforeseen circumstance (such as being unable to get enough money together), then most likely won’t have time left before the closing date comes around again—which means having no source for funds whatsoever!
Things to do before going for fundraising for your Startup
Before you go for fundraising for your startup, it’s important to do the following:
- Evaluate your capital needs and prepare a budget. Your capital needs should be based on the business model, stage of business, and growth rate. This step will help you determine how much money you will need to raise. If you are still unsure about this step, talk with an Accounting expert at Startup Steroid, who can guide you through this process.
- Build a talented team around yourself as needed based on your Startup’s culture and ideology.
- Have an MVP and proof of concept.
- Know your market and audience
- Prepare a comprehensive Pitch deck.
4 ways to get first funding for your Startup business
It all starts with an idea. The product or service that no one has ever done before, but it is so painfully obvious. You believe that your idea can change the world. You get excited and decide to turn it into a company. You have worked day and night, pulled off your concept with a co-founder, and have an MVP (minimum viable product). What’s next? You know that investment in your company will accelerate growth. It’s time to find ways to fund your startup.
Accelerators and Incubators
If you are in early-stage and looking to get funding for a startup and mentorship at the same time, then incubators and accelerators can be your best bet. These programs help startups with capital and much-needed advice. They focus on early-phase startups that are in the product-development phase and do not have a developed business model. Accelerators focus on speeding up the growth of existing companies that already have a minimum viable product (MVP) in the hands of early adopters with an established product-market fit.
These are short-term programs designed to help startups grow their businesses by providing them with access to resources like mentorship, co-working space, networks, etc., which would otherwise not be available due to the high cost involved in setting up such facilities themselves or finding them elsewhere. You should go for such programs when you are looking for someone who can guide you through this journey, someone who knows what it takes to build something great!
Some of the leading Accelerators and Incubators include The Founder Institute and Grid 110.
Angel investors are individuals with extra cash and considerable interest in investing in innovative startups. They look for potential early-stage startups, bring on capital and SMART money to the table, monitor the growth of a startup, and mentor along the way.
Angel Investors are typically high-net-worth individuals who have had successful careers in business or finance but who want to use their experience to better invest their money into high-growth companies like yours. They will not only provide valuable mentorship during your early stages of development but also take an active role in managing your company once it reaches certain milestones, such as profitability or significant sales volume.
Startup Steroid is connecting Angel Investors and Startups, making it best platform to get funding for startup.
How to get funding for startup at Startup Steroid?
You can start by registering your Startup and creating a comprehensive profile. Startup Steroid platform has 1000+ investors onboard looking for exciting Startups and supporting them with much-needed capital.
Crowdfunding is the process where a business or project seeks funding from a large number of people, who then donate small amounts of money in exchange for rewards.
Crowdfunding has been around since 2009 and has proven to be a great way for startups to raise funds quickly and efficiently. It can also help you connect with customers who want to support your company’s mission. While there are many sites that allow users to invest their money, Kickstarter is one of the most well-known crowdfunding platforms out there today.
You must have seen Shark Tank, right? A Startup pitching event is quite similar to that. The difference is that hundreds of serious investors participate in such pitching events. It is one of the best places to get funding for startup for two reasons – You can get the funding, and even if you fail in doing so, you will surely get great exposure, valuable feedback, and meaningful networks.
To get started, you need to look for the Startup events around you. Such competitions have an entry fee. To increase your chances of getting selected, make your Startup idea appealing and creative. Also, work on your pitch deck.
In conclusion, it is important to always think about the future of your startup business and its growth. You need to invest in a method that can help you get started as soon as possible while bringing something more than capital.
It might take some time to understand how to get funding for startup, but once things start moving in the right direction, then it will become easier for you to raise funds from different sources, such as angel investors or even crowdfunding campaigns.
I’m the co-founder of Startup Steroid. Being a founder/ co-founder (of multiple businesses) and investor (in multiple startups) myself, I experienced the challenges that an investor and a founder face. So, we built a network of 2,000+ Investors, Startup Founders, and Ecosystem Partners since its foundation and still growing. We empower innovative ideas by providing direct access to smart money and meaningful networks.
I am also the CEO of SPV Hub.