How to Get Startup Capital Without Taking on Big Debt
This post may contain affiliate links. Please read my disclosure page for more info.
Whether you’ve developed your startup to net some extra spending money or want to leave the traditional job scene entirely, there almost always comes a point where you, as an entrepreneur, need more capital to push your startup’s business model into peak performance. How and where to find the money to start a new business has been a hotly-debated topic in entrepreneurial circles for decades, and there almost as many suggestions as there are people to give them.
But many of these usually require taking on debt. Sometimes lots of debt, as many small-business loans come with high interest rates or other concerns attached. So here are our top tips for how to get startup capital without taking on big debt, to help you be more frugal at work.
Equity and Service Trading
So, this isn’t necessarily earning cash for your startup; but it’s receiving things with cash value. Trading equity or services for things you need is a straightforward, simple, and often effective way to get what you need without spending money. A good example might be bartering business services for office space, or equity for shared equipment use. Especially when dealing with other small businesses and startups, this is a great way not just to gain access to what your business needs to succeed, but to network and make connections.
The caveat is that you must always faithfully fulfill on your obligations. Not doing so is a quick way to gain a very negative reputation for yourself and your business, and can effectively cripple many future dealings.
Do you have the names of a few key, high-value clients whoare guaranteed to have a large stake in your business? If you believe they see substantial value in your startup or small business, sometimes you can negotiate for an advance from them. In this way, you can provide them often with discounted services or other substantial benefit, while you can get the cash you need without tying yourself to a high interest rate.
Soliciting venture capitalists and angel investors can be a strong way to gain a substantial amount of funds. However, it can take a substantial effort to net an investor. Typically, you need a strong business plan, warm introductions, and a scalable model worth their investment. Improving your oration skills and practicing the pitches you’ll make to a potential investor are both a must.
Another great way to access funding is to attempt a crowdfunding campaign for your business. This option requires a lot of time and money spent on promotions, and being able to make a strong value proposition to potential funders. This includes giving back substantial offerings to those who reward you with their cash, and keeping in touch with your donator base. Few crowdsourced funding campaigns hit their mark, but there are also a notable amount of campaigns which dramatically overshoot their goals. As an additional perk, crowdsourcing campaigns can also help your startup or small business gain a lot more visibility… and therefore more customers.
The Bottom Line
Achieving quality funding for your small business or startup requires diligence, patience and a lot of hard work. The benefits are real and tangible, and hundreds of entrepreneurial spirits get the funding they need using the opportunities listed above. Just make sure that you have realistic expectations from the outset, and project the success you want to see for your business clearly. The success of your small business, after all, will always start with you.
Photo courtesy of: PublicDomainPictures
Latest posts by Kayla (see all)
- 10 Great Ways to Minimize Your Student Debt - March 22, 2017
- Will Using a Timeshare Help You Save Money on Vacation? - February 15, 2017
- Radius Bank Hybrid Checking Account Review: Checking Made Easier - October 25, 2015