How To Raise Capital For Your Start Up Business
The market is moving faster than ever. Raising capital for your business in the seed investment fund stage can make the difference between becoming a market leader or being left in the dust.
What Is The Seed Investment Fund Stage?
The seed investment fund stage is the first step in finding investors for your business. Seed money, as it’s called, provides the funds you need to develop your business model, do necessary research, and hash out all the details of your product or service before finding customers.
Finding this type of investment isn’t easy as it’s a big risk for investors, but without solid seed investment, your idea may never get off the ground.
Catch-22, anyone?
Don’t worry, there are a number of great ways to seek seed investment funding for your start up. Let’s take a look at a few options you may not expect.
How To Raise Capital With Seed Investment Funds
Seed-stage funding may be tough, but it’s big business. There are plenty of investors and investment firms looking to get in on the ground floor when they find great ideas. Here’s just a few.
Find a Corporate Backer
Did you know that many major corporations operate their own investment firms? Companies like Google, Comcast, and Siemens are all actively searching for investment opportunities that could give their businesses an edge. This is a great opportunity for entrepreneurs in with an innovative tech idea, and with investment already up by 7.5% in 2017, there’s no time like the present to seek this seed investment funding.
Ask an Angel
Angel investors are wealthy individuals who invest their private funds in small businesses and start ups. These people may need some convincing, but they represent a great opportunity for entrepreneurs (especially first-timers), as they aren’t tied down by the constraints and policies of investment firms. Essentially, they do what they want and are known for going with their gut. This means that regardless of previous rejection by other firms or investors, there is still a real opportunity to strike a chord with the right angel.
Ready to find an angel of your own? Here are some places to get a head start.
- FundingPost - An organization that works online and off to match entrepreneurs with angels.
- Active Capital - One of the best online resources for getting connected to an angel.
- Gust - Build a portfolio, share your ideas, and gain investment all in one place.
Crowdfund It
We’ve all heard the success stories of crowdfunding on sites like Kickstarter or Gofundme, but do they really work? The answer is yes.
The idea behind crowdfunding is that everyday people can fund your company via an online medium in exchange for a product, service, or equity. Crowdfunding is rapidly overtaking corporate ventures and angel investors and is becoming one of the best ways to find seed money for young businesses.
Remember that when you’re selling your idea on crowdfunding sites, you’re not speaking to investors, but to consumers. Put your heart and soul into describing your product or service and the people will respond!
Accelerate your Start Up
Business accelerators are full-package investment opportunities that provide seed investment funding and many other services (expert advice, a workspace, networking, etc.) in exchange for equity.
Accelerators are interesting because no two are the same. Each unique accelerator focuses on one industry or sector, meaning that if you get accepted, you’ll have instant access to resources specific to your needs. Accelerators normally provide a predetermined amount of seed investment funds and last for a short period of time (3-6 months). Find one that fits your needs here.
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