Ways to secure funding

Ways to secure funding

Many entrepreneurs and soon to be founders complain about difficulty in raising funds for startups. Startups are very different than small businesses. They gro rapidly in short time as opposed to small businesses which grow steadily. There are startup incubators and accelerators to help startups grow. Incubators aim for long term growth and provide office space as well as legal counsel along with resources in terms of mentorship. Incubators usually do not provide funding, they may connect you with investors instead. Accelerators on the other hand focus on rapid growth in short period. Accelerators offer equity, connect startups with mentors but are only for startups that are up and running.

There are many options for startup funding. One may start their own venture by putting in their personal savings, which help in getting funding from investors in future if startup is successfully running. There are many sources that offer a chance to put up information about your startup and ask people for help, which is called crowdfunding. In case of crowdfunding there could be number of investors. Entrepreneurs may explicitly mention whether they intend to repay the money with interest or offer equity to those who crowdsource their startup. One of the major and most common options is equity financing. Investors invest large amounts in startup if they like the idea. It is one of the best ways because when a seasoned investor is willing to put up the money into your startup, you are definitely into something great. Also, gudinace offered by them helps a lot.

Also angel investors are individuals with high net worth. They are willing to take risks and invest in startups. Also there is an option of business line of credit. It is very user-friendly, you may withdraw the amount you need, from your sanctioned maximum upper limit and repay afterward. SBA microloans may take long time for approval and hence not preferred for many startups, but if you plan and apply early it could prove to be beneficial

John Colin

I am a technology journalist with over two decades of press experience. I have spent much of the last ten years, focusing on open source, tech gadgets, data analytics and intelligence, Internet of things, cloud computing, mobile devices, and data management. I'm a senior editor at Mashable's covering data analytics, venture capital, (SaaS) applications, cloud and enterprise software out of New York.