Despite a pandemic and a troubled economy, venture capitalists invested $156.2 billion into startups last year. That’s $428 million a day! And while that sounds like pennies from heaven, venture capital investment isn’t a perfect fit for every business owner. Fortunately, there are other alternatives for funding great ideas and innovative startups.
Bootstrapping.
Ever heard the phrase: pull yourself up by your bootstraps? That’s what some people do to get their business up and running. They use their own money, take on personal debt, and found a business without outside help. Taking out a second mortgage on your home and cashing in your kids’ college investment funds might seem risky, but some people prefer that to giving up control and sharing profits.
Friends and family.
You’d be surprised how many people believe in you and your idea enough to invest $10,000 or $15,000. But before you take money from your favorite uncle or your wife’s best friend, ask yourself: “can this relationship survive the money they’re willing to invest.” If the answer is yes, put everything in writing.
Small Business Administration Loan.
The SBA was created to boost the U.S. economy by providing assistance to small businesses through guidance and helping secure loans. And because the federal government runs the SBA, they typically offer favorable terms.
Angel investors.
Angels fall between friends and family and venture capitalists. These high-net-worth individuals are looking for investments with a higher rate of return. In exchange for a sizeable investment, they ask for equity in the business.
Crowdfunding.
Crowdfunding is an extremely popular way to raise funds to finance a project. It’s used for everything from movie productions to concerts to small business launches. It involves raising funds by having large groups of people invest small amounts of money.
Seeking outside financing to launch a company that brings an innovative idea to life is more often than not a necessity. But venture capitalists are not the only option. Are you looking for a funding solution that fits your vision? Miami CFO has the executive-level financial team and financial perspective to help you develop a comprehensive plan. Use this link to schedule a meeting and start the process: https://calendly.com/miami-cfo.
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