Most startups need to raise money to grow their business. Some companies fund their startups by bootstrapping before getting funding from investors.
Virtually all businesses begin as micro-businesses. Many will fail, but some will grow into small, medium or large enterprises.
There are many reasons why businesses fail, including poor management, founder dysfunction, product and service issues. But, the primary reason businesses fail is that they run out of cash.
Getting funding from investors is necessary for startup growth and survival, but it can be costly and risky. Why? Founders end up having less control regarding business decisions when they’re spending investor’s money. Founders also end up giving up company equity.
According to Anna Vital, “every time you get funding, you give up a piece of your company. The more funding you get, the more company you give up. That ‘piece of company’ is ‘equity.’ Everyone you give it to becomes a co-owner of your company.” She explains the process of how funding works here.
There are several ways to get funding for your startup. You can get a business loan, angel funding and venture capital as well as crowdfunding.
Crowdsourcing and crowdfunding sites fund ventures by raising monetary contributions from a large number of people online. Learn 7 Best Practices for Crowfunding for Non-Profits and Businesses. Learn how to crack the crowdfunding code here.
This infographic below shows 4 ways to secure funding for your startup.
Additional resources for raising money for your startup company:
- The the Small Business Administration (SBA) have financing programs available for business owners, including the Basic 7(a) Loan Program and the Microloan Program.
- To identify the right financing for your business, you can use the Loans and Grants Search Tool. In a few quick steps, the tool will guide you to government resources to access financing for your business.
- Women Business Owners – Finding the Right Loans, Grants and Financing
- Learn how to prepare a loan proposal.
- How to Raise Startup Funding From Unlikely Angel Investors
- Crowdfunding for Non-Profits and Businesses: 7 Best Practices
- Revenue Is the Only Funding Your Startup Should Seek
- Lenders that offer personal and business loans with faster and easier approvals.
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