Venture capital firms. Venture capital firms are a good place for startups to raise capital. Most businesses may fail to get approved for a bank loan or find individual investors, but Venture capital firms are ready to take more considerable risks. They collect funds from wealthy individuals and invest in various profiles. If your company fits their profile, you will secure a good amount of capital for your startup. Look into their investment profile to find out if your company suits their interests.
Angel investors. Also known as private investors or seed investors, they are high-net-worth individuals who provide capital backing for startups and small businesses. They are most likely friends and family of the startup owner. Look for angel investors within your circle and share with them your ideas and plans. You may offer them equity in your venture for their investment.
Crowd-funding. Websites like Kickstarter, Indiegogo, and GoFundMe allow small business owners and startup entrepreneurs to crowdsource their capital. It is the general public that is investing in your business idea. In 2015 over US$34 billion was raised through crowdfunding sources.
Once you have decided to start raising money for your business, the next step is to find investors. 95% of startups fail in the first year because of their inability to raise enough capital. You may have the best product on the market but without money, you can not take your business to the next level. Here are three things you can do to make sure your business gets the funds it deserves.
Talk about your business. Most investors do not know which startups require funding. Make some noise and let people know that you are actively looking for investors.
Focus on your pitch. You do not want to bore your audience with a long and pointless presentation. Focus on key aspects of your business and have some fun while doing so.
Build a strong network. Even if you are not yet looking for external funding, you may need to do so in the future. Start building a solid network with fellow entrepreneurs, senior executives, and industry leaders.