gordon@gordontredgold.com

Small Business Funding Strategies

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Not all small businesses require funding, but most do. Usually a small business will have an investor of some kind that has provided the startup funds. Sometimes investors provide mentorship too, and offer advice. This is not always the case. With bank loans, for instance, you will only get the money and the deadline. Luckily there are other, better options available. 

Crowdfunding 

For certain types of business, such as :https://www.designcloud.app/, crowdfunding is by far the best option. It allows you to raise the capital you need to start up your business or create a product with the need to pay it back. The investors from crowdfunding are interested in your product and are prepared to front the cash. As long as you deliver, everyone’s happy. 

To start on the road to crowdfunding sign up to platforms like Kickstarter, Indiegogo, and Patreon. Create an account and pitch your idea to the crowd. If you can generate enough interest in the product and raise enough cash, all you have to do is deliver on your promises, no strings attached. 

Angel Investors 

Angel investors are another excellent way in for small businesses and brands. Angel investors are people with an interest in specific ideas and are willing to invest at the seed stage. This means there is high risk for them and perhaps pressure for you to deliver. In return an Angel investor will usually require some convertible debt or equity ownership. 

Although they can sometimes be difficult to find, you can still access angel investors in several ways. One of the best ways is to search your business networks for information on investors who might be interested in your product or service. They are also findable on social channels or through an incubator program. After you find an investor it’s time to make an unbeatable pitch. 

VC Firms

An excellent way for small businesses to access funding is through venture capital firms. These are pools of investors interested in finding small businesses with potential to fund. They can offer you all the money you need or part of it as a loan or for a share in the business. Usually, a VC firm will be interested in viable businesses with a good return on investment (ROI). 

Finding this funding source is far easier than finding Angel investors, however, it does have slightly more risk for investors so they require more equity. With crowdfunding, you are only expected to deliver a product or service, but VC firms are looking for a return on their money which could mean owning a large share of your business. 

Startup Incubators 

If you’re a start-up in need of funding or mentorship an incubator program could be the best solution. This type of funding will provide you with office space, mentorship, and access to angel investors. It protects your company in the early stages of growth and gives you the support you need to overcome the challenges of making your business profitable initially. If you need a strategy to get your business off the ground and open up future opportunities, this could be the answer. 

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