Starting a business costs money. If you don’t have enough saved up, you need to find it elsewhere. Here’s a simple guide to the main ways to get funding for your startup.
1. Use Your Own Money (Bootstrapping)
- What it is: Pay for everything yourself from your savings.
- Good for: Keeping full control of your business.
- Downside: It can be slow, and you risk your own money.
2. Ask People You Know
- What it is: Get loans or investments from friends and family.
- Good for: Getting that first bit of cash to start.
- Important: Write everything down to avoid hurt feelings later.
3. Get a Loan
- What it is: Borrow money from a bank or online lender and pay it back with interest.
- Good for: When you need a specific amount for a specific thing (like buying equipment).
- The Problem: Banks often say “no” to brand-new businesses.
- The Solution: Online lenders often have easier rules. A service like KoboMerchants.com can help you find these lenders quickly without filling out a bunch of forms.
4. Find an Investor
- Angel Investors: Wealthy people who give you money in exchange for a piece of your company.
- Venture Capital (VC): Firms that invest a lot of money in fast-growing startups for a large share of the business.
- Good for: Businesses that plan to get very big, very fast.
- Downside: You give up some ownership and control.
5. Other Cool Ways to Get Cash
- Crowdfunding: Ask a lot of people online for small amounts of money (like on Kickstarter).
- Grants: Free money from the government or companies for certain types of businesses (e.g., tech, science, or businesses run by minorities or veterans). You don’t pay it back.
No matter how you get
