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10 Ways to Fund Your New Startup Idea and Get it Started Up!
Do you have an excellent startup idea
for a business or something and have the idea and plan in place but need the financial help to get your startup idea, started up? Well if you're someone, some individual, that has a new startup idea and wants to actually get it started up and running and ticking over and doing what it was created to do (provide a service and make money). Then it's fair game to say you're probably someone, say, an individual, that could do with a helping hand, financially, a cash injection if you will, that can help you get your startup, started up! Right?
Well if that's you, and you're walking about kicking stones hurting yourself trying to think up ways to raise some funding for it. Hopefully, and maybe, one or more of the 10 ways of raising funds to fund your new startup idea that I'll be sharing with you will be just what you need to get your startup, started up!
Hint: In my posts, I'll be talking about using Angel Investors to Capitalists, Bootstrapping to Crowdfunding & Seedfunding, Lenders, Incubators and more
! I'll share some of the basic stuff of each with you and a little more so you can come to know about these things and how they work and how you can take advantage of them to get your startup - well, you know the rest!
And to start this off with first of all, I'd like to start off with talking about Crowdfunding
Think you know everything there basically is to know about crowdfunding and launching new startups from the power of the crowd? Or perhaps you don't know much at all but would like to learn? Well gather round because you're just about to find out all you need to know about crowdfunding from the mind of IdealMike
And because, crowdfunding is probably one of the most familiar terms with people these days in this informational and technological age where brains is the new brawn. Or something! But a generation that has and uses clouds and crowds. And just like the animals know, there's safety and power in the crowd! Many people have used crowdfunding to get their new startup up and thriving today!
Of course, there has also been a lot of flops and fails in crowdfunding too. There's been many things the crowd has contributed to that seemed great at first but only headed south and flopped! There's also been many that just sort of stopped dead in their tracks for some reason. But every now and then, there's one that manages to use the crowd to become a great success!
10 Ways to Fund Your Startup: Crowdfunding
One can use crowdfunding to get his/her business off the ground but there are different types of crowdfunding campaigns and each have their own pros and cons, benefits and disadvantages. I'll talk about two of the most used types of crowdfunding crowds today that individuals and businesses use to get their business idea started.
Traditional (Donation Based) Crowdfunding
With Traditional Crowdfunding you can raise money without giving up any equity from your business. When you use Traditional Crowdfunding it's an excellent way to not only get to know your targeted audience even better but really let you find out ways in which you can tweak or change your idea, business, product etc that you have but it gives you the chance to really improve your pitch to those that would be your most likely backers/contributors. You'll mostly be pitching to everyone that needs your product, but of course, you don't have to give them anything back if they donate to it.
It's hard to say it to some people sometimes but unlike the Pebble for example, not every good idea makes 500x what their actual fundraising target was. So don't get caught up in the success stories like that out there thinking yours will too. Plus it can take a long time to prepare and execute a successful crowdfunding campaign which requires doing your homework first!
With Equity Crowdfunding you give up a stake in your company in exchange for their contributions. That means a slice of your profits that you would make when and if you do. With Equity Crowdfunding you must have a solid and viable business plan in place and know all the answers to any questions that potential "dragons" would ask you. But you can pitch your startup idea to a bigger crowd of actual investors looking for great ideas to back. So while this can often help if the idea is good and the business plan solid and help to get it started, later down the line it eats some profit.
Tip: Equity crowdfunding is a bit of a trickier thing to pull off as there are a lot of legalities and regulations that go with it as far as your investors/backers go. So it's likely you'll need to do it all through a lawyer as they'll be able to sort out the PPM (Private Placement Memorandum) that you need for any offers you make to them as their stake.
The 4 Types of Crowdfunding
There are several other types of crowdfunding too. Here is a list and description of all 4 types of crowdfunding.
- Equity Crowdfunding: This is where the backers get back a cut from your monthly or annual profits for the rest of the life of your business. It has the best success but least ROI.
- Lending Based Crowdfunding: This is where the backers are paid back their money over a length of time. They basically invest something and get their money back plus a little on top.
- Reward Based Crowdfunding: This is where the backers will get back something in return for their contribution, like t-shirts of a first edition of the Pebble watch or something.
- Donation Based Crowdfunding: This is where the backers contributions go towards helping a charity of some kind such as starving kids in Africa or or life straws, etc etc.
Okay and that's part 1
of 10 Ways to Fund Your Startup: Crowdfunding
. What types there are of it and how each of them basically works. And can or could work for you and your new startup idea too! I hope this has been insightful for you and you've learned something new. Even if you're already fairly clued up on how crowdfunding works and have done it yourself successfully, or not.
Have you ever used the power of the crowd and used crowdfunding to successfully launch your new startup?
Do you have a unique and solid business idea or plan that can be helped with the power of crowdfunding?
Follow me, I'll make your dreams come true.