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4 Tips on Raising Capital to Fund a New Start Up Business

November 9, 2021 by BPM Team

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In the early days of a startup, entrepreneurs need to raise capital to fund their business. Click here to learn more about startup funding stages. Raising money can be challenging for many reasons, but some tips will help you do it more effectively. We’ll cover four ways to raise funds for your new businesses and how they might work best for you in this post.

saving jar full of coins and mini blackboard with text start up business

1. Try crowdfunding

If you are looking for a quick way to raise funds, crowdfunding might be the answer. There are many different types of funding platforms available, including Indiegogo and Kickstarter. Crowdfunding can also fit into your overall business strategy by helping you test out products or ideas before fully committing to them to save money down the road on research and development costs. Crowdfunding is fast, but it’s not easy – there has been $34 Billion pledged globally in 2016 alone! The average successful campaign takes about 60 days but requires planning since all campaigns must meet their goals within 30-60 days (typically).

2. Sell high-value assets 

If your business is booming and you want to fund new ventures, consider selling high-value assets like property, and if you’re wondering how to sell my house fast? These guys can help. Look for ways to liquidate excess capital and invest it in your company’s future by getting more financing from investors. You can use online finance calculators such as this one on Google Finance that will show you how much money you could potentially get based upon what kind of asset is being sold: The average person who invests $100k into a startup makes about $38k per year within three years with an expected return rate between 14-20%. Not bad!

3. Consider a business loan

If you are trying to raise capital but running on a tight budget, consider drawing up an action plan and applying for small business loans. That way, if your idea doesn’t pan out as planned or your company isn’t profitable enough yet, you won’t be stuck with debt that’s too much for you to handle. Business loan lenders typically don’t care about personal credit scores so long as the applicant has social security numbers (or ITINs), verifiable employment history of at least two years in length, and earned income that is equal to three times more than what they’re requesting from their lender and good collateral such as real estate deeds.

4. Bootcamping 

Bootcamp is the practice of hosting a business accelerator for young startup companies. This can help new businesses get off their feet by giving them some initial capital, industry advice, and mentorship from experienced entrepreneurs and investors looking to invest in promising new ventures. Bootcamps typically last about three months, but they require substantial investments upfront, so you have to be 100% sure that your idea is viable before signing on!

Raising capital to fund a new business isn’t easy, but it is possible with creativity and research. Remember that there are many ways, such as boot camps, crowdfunding, and loans, available to give you the funds you need so long as you create an action plan for how your company will succeed within its first three years in operation!

You may also like: How Does Small Business Funding Work?

Image source: Shutterstock.com

Filed Under: Featured Posts, Finance, Start-up Tagged With: Crowdfunding, Featured Article, finance, funding, startup

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