Startup funding is the most critical and challenging part of the overall startup journey. The fund is required for building your product/service POC, a website, or an App. You need to hire and arrange a team, workspace, gadgets & tools. You also have to pay for registering the company, taxation, electricity, network.
Whether you are going to introduce a new technology or you have an idea to fill a gap in the market—you will need a right business model and startup funds. Enough at least to get off the ground in your early days.
In simple words: you will need money to convert your life-changing ideas into reality.
This is a crucial stage because most of the startups fail due to their unsuccessful attempts to raise capital. Therefore, one should be aware of every option there is—to keep the startup going.
The good news is—there are all kinds of startup funding sources and tools available to support the size of your innovation at every stage.
Here are the 8 startup funding approaches that will help to fight the money problem:
Pre-Seed Stage for startup funding
These steps are for the seed-stage where you need money for a solution and business-model development to prove that your products are working (before you sell it to customers).
The amount of funds needed is small at this stage.
1. Bootstrapping
Bootstrapping means scraping any personal funds you can gather to support your business. This can include your savings account, credit cards, or any other funds you can afford personally.
This is a good option because you don’t have to ask for outside capital. Meaning you don’t need to give away a stake in your company, nor do you have to live up to the investor’s expectations. You hold all the rights for all the decisions and directions you want to take. You run your startup on your terms.
The only caveat though, you don’t get the outside influence. Outside stakeholder or investors brings with them network and support which can have a huge impact on the startup. Nevertheless, bootstrapping is a great way to fuel your under-process vehicle.
2. Family and Friends
Raising capital from friends and family is an attractive solution to get your business started. They are more likely to offer money because they know you and your idea. Hence, they are more inclined to take chances.
Other than this, it also helps to build a network of friends and family which helps to build a positive impact because they trusted your idea.
Keep your goals and plans transparent to your friends and family. Being honest with the risk of your venture helps to create a trustful relationship throughout.
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