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How To Raise Capital For Your Business

What is number one excuse for not starting the business of your dreams? You might say confidence, leadership, resources, skills, teams. However, most people will say, it’s money. Even if you have been following all of our personal finance advice, you still may need to raise capital for your business. In this article, we’ll show you how to get the money you need to start a new business successfully.

Your Savings Account

In the beginning, you should consider funding your business through your savings account. Only risk an amount that you can afford to lose for a startup. You have worked hard using many creative ways to save money. That being said, a sizeable investment into your own business makes you the 100% owner of the company. While all the risk is yours, you can reap the rewards with increased profits. Clearly, bootstrapping a business financially can be a savvy way to get your business going.

Property Equity Loans

If you already have assets in land, houses or buildings, you can take out an equity loan to raise capital. Again, here you have full control of your business since you are taking the loan yourself. The advantage with equity loans are the lower interest rates. However, you still have to pay that money back. Long term, you shouldn’t take out more money than you could reasonably pay off. In any type of start up business, you have to plan for the best and worse case scenarios.

Venture Capitalists

For larger startups, you might need a sizable amount of capital. In fact, many startups raise millions of dollars in capital every year. With a solid business plan and pitch deck, you can attract venture capital companies that will give you funding in exchange for equity in your company. Sometimes, these companies will take a controlling share in the business. Although you may have to give up control, the capital they provide could make everyone more money in the long run.

Angel Investors

Similar to venture capitalists, angel investors also take equity in startups. Typically, they are individuals rather than investment companies. If you are lucky enough to find the right angel investor, they could provide the funding you need with much more flexible terms. Additionally, these types of private investors can take a hands on role if you start your own insurance agency. The experience of angels is a unique advantage to their capital investment. Or, they can take no management responsibility at all. While these investors are harder to find, the right match could be the perfect funding partner for your business.

Small Business Grants

Moreover, you and your business could qualify for small business grants. Depending on the company industry, there are dedicated grants available every year to take your business to the next level. On top of that, if you are a woman or minority, you could be eligible for multiple grants. Believe in yourself and your business. If you apply to fitting grants, you could end up funding your business through grants, which is a tremendous opportunity.

When starting a business, raising capital can be a huge challenge. It should not be an excuse. Take a practical approach to which funding sources are right for you. If possible, fund your business using all of your personal finance skills, pulling from your savings or equity. Otherwise, look for the right funding partners to make you startup a reality.