In order to succeed, startups require nothing less than passion, flair, tenacity and most importantly, money.
Entrepreneurial spirit takes care of most of those ingredients, but when it comes to cash, startups have been known to hit a brick wall. But that shouldn’t be the journey’s end.
Loans are one option, but they inject just as much risk into your venture as they do money.
To keep that risk at a minimum, here are six totally free ways to fund a startup that don’t involve taking out a loan.
If you think you can win the hearts (and wallets) of your target market before you actually launch, crowdfunding may be the way to go.
Typically, the startup will produce a video to introduce and pitch their product or service. If it’s of interest to those on crowdfunding websites, people will happily pledge money in exchange for things like future discounts, freebies, and the like.
2. Venture Capitalists
A venture capitalist is an investor (or sometimes, a small group of investors) who provides either capital or support for startup ventures who do not have access to equities markets.
The National Venture Capitalist Association is a good place to start your search, but also, you may want to think about expanding your professional network to help you find the right investor.
This avenue isn’t an easy one to stroll down, but if you manage to pique an investor's interest, you could be in for a relatively cushy ride thereafter.
3. Startup Accelerators
Finding an investor out there in the big wide world may seem intimidating, so why not try a startup accelerator instead?
A startup accelerator is a company that accepts applications from startups throughout the year, and then periodically invests in a selected few.
4. Equity Crowdfunding
Like traditional crowdfunding, this method gets a number of different people involved in your project. However, instead of offering products or services as incentives to invest, equity crowdfunding sites allow you to sell actual shares of your company.
It’s basically crowdsourced venture capital, and it’s becoming a very popular option for startups across the globe.
5. Friends & Family
If venture capitalists don’t believe in your idea, your friends and family might.
You should pitch your idea, ask for advice, and ultimately, offer them an incentive to invest their money. That may be in the form of a share in the profits, access to free services, or something else that you can leverage.
6. Fund it Yourself
Bear with me on this one.
Sometimes, reality is harsh – especially for startups. You may well explore each of the five options above and have absolutely no success. It sucks, but it happens.
But that shouldn’t stop you if you truly believe in your idea, because there is one more solution.
If it comes down to it, you may have to fund your venture by yourself. And if that means having to work part-time (or even full-time) for a few years, then so be it.
Don’t Give Up
Startups are hard to get off the ground, particularly if you don’t already have the funds. However, it’s absolutely essential that you don’t give up – especially if you truly believe in your proposed product or service.
About the Author
Kaya Ismail is a wordsmith and founder of Employ the Internet. He is a seasoned content marketer with a love for video games and coffee.