Capital is the amount of money that owners get to spend on various business operations. Raising capital is not an easy job. In fact, this is one of the most difficult tasks in the entire business process. It requires a lot of patience and determination to acquire funds for your business. Most importantly you also have to learn about the options that you have for raising capital. In this post, we will discuss about the five of them.
Self-funding is known as bootstrapping. This is an effective way of business funding. In fact, in a recent study, it has also been found that most of the startups opt for bootstrapping for funding their business. You can invest your own savings in a business. In addition to that, you can also ask your family members and friends to invest in it.
This is a new way of funding a startup. In crowdfunding, you have to collect money from a large number of people. However, you have to ensure that people can see some potential success in your business. If they don't see any innovation in your idea, then they may not fund your business. Entrepreneurs mainly use the power of the internet for crowdfunding their business.
3. Angel Investment
Angel investors are also known as informal investors. They come with surplus cash and invest in a startup. Most of the time, they work in a group. It helps them to scrutinise the business proposal collectively. Sometimes they also offer business coaching and mentoring services to the young entrepreneurs. In this way, they help startups to grow from all the aspect.
4. Venture Capital
This option is not for everyone. However, if you are chasing big dreams and if you want to capture the entire market, then you should opt for venture capital. This type of capitalists only invests on those companies that have huge potential. They evaluate businesses from two different points of view, sustainability and scalability.
A venture capitalist invests in a company against equity. On the other hand, they exit when there's an IPO or acquisition. Small businesses can also opt for venture capital investment if they are already generating revenues and want to go beyond the startup phase. Fast-growing companies can also choose venture capital to speed up their growth.
5. Bank Loan
This is another best option that you can choose to raise fund for your business. Banks generally offer two different types of financing options for businesses. One is funding, and other is working capital loan. If you don't qualify for a bank loan, then you can also consider getting business loans from microfinance providers.
These are the five best funding options that you can consider to raise business capital. Meanwhile, you should also consider hiring a professional accountant for your business. He/she will prepare and monitor your financial record. Apart from just managing your money, professional accountants might also advise you on issues like invoicing, stock control and working capital. So, this is all for now. Hope you have enjoyed reading it.
Member since: 26th November 2018
Having enriching experience in the world of digital marketing, I have created a niche for myself in the industry. The primary focus lies in writing, blogs, articles and different stuff that help businesses...