The 5 Most Reliable Ways to Get Funded
Crowdfunding Platform – How To Get Funded More Effectively?
Getting funded is a quest in itself. Unfortunately, people take many routes to get funding for their projects, but they just either don’t know how to find it, or they never find it at all. Here are five of the most reliable sources of funding that have been around forever and that you can count on to get you started:
Angel Investors, Private Funding Sources, Crowdfunding, Foundations, and Grants. It isn’t meant to be an exhaustive list of funding sources; it’s meant to give you a starting point. If you need more information, we recommend talking to someone who knows more about getting funded.
Angel Investors
They’re called angels because they invest “hostess” capital for entrepreneurs in return for a percentage of the business. Usually, they take care of much of the business-related legwork, leaving its founders to focus on marketing and building their brand. However, if someone has a product that solves a problem or offers something that can be useful, they’re likely to be looking for some method for finding the capital to make it happen. If you have a combination of an excellent business idea and marketable skills, then you’ve got a good chance of getting funded through an angel investor.
Private Funding Sources
They come in two flavors: venture capitalists and private investors. Venture capitalists usually invest their own money in the entrepreneur’s project. They typically take more risk than an angel investor, so they expect to pay out more in the form of personal investment as well as less on-the-job training. On the other hand, private investors typically pool money with other investors to create a portfolio of ventures. There are also institutional investors such as pension funds and hedge funds that invest in more traditional ways.
Crowdfunding
It sounds like a strange combination, but it isn’t. Someone will take a project idea and seek to fund it through several different sources to get it started. Some examples include putting up a website online, a series of commercials, or performing a play. Each of these approaches will raise a different amount of capital. ONPASSIVE’s O-Bless is one of the best funding platforms where it allows you to run campaigns and fund the need effectively.
Seed Investors
Seed investing is a highly skilled and risky practice, and only experts should engage in it. Seed investing is when an individual or business team takes a small and obscure idea and goes to work raising a significant amount of capital. A significant amount of risk is involved because there is less cushion for the business to fail during the process. Most seed investors will insist that the teams prove that their ideas are profitable and raise the required capital.
Disqualified Investors
This type of venture funding involves disinterested or incompetent types of investors. Typically, these are wealthy individuals who do not understand the industry. To get funded by such investors, you will have to do your due diligence by researching the company to ensure that the business plan is credible. This process of doing your due diligence is one of the most reliable ways to get funded if the business has the potential for long-term success.
Private Equity
Capital raised from private equity firms is one of the most reliable ways to get funded, and these firms generally prefer to see tangible results of their investments before providing money to a business. Therefore, it is challenging to get funded through a venture capital firm without showing tangible results from your business.
However, as previously mentioned, the risks involved are significant, and the turnaround time on some of these types of ventures can be very long. It is why it is more often than not best to apply to a private equity program through your bank. On a final note, it is worth noting that venture capitalists are notoriously finicky and will cut deals quickly, so it is often a good idea to talk to a banker about your business idea before approaching them about funding it.
Seed Capital
Seed Capital is one of the easiest and most reliable ways to get funded if done correctly. Typically, seed capital funds companies in the early stages of development. Most seed capital programs require a significant risk to the company, which makes them appealing to investors.
As a result, it is usually a good idea to work with an angel investor or small business investor before you look to raise seed capital. On a final note, if you are in a startup stage, it is always best to focus on obtaining a small business loan rather than raising seed capital.