Easy Ways To Raise Capital For Your New Venture

StrategyDriven Managing Your Finances Article |Raise Capital|Easy Ways To Raise Capital For Your New VentureAlmost three-quarters of new businesses and startups need a helping hand to get up and running, so if you are trying to figure out how to raise some much-needed capital, you are far from alone.

Sadly, money does not grow on trees – life and business would be so much easier if it did – but there are some ways to get the capital that you need to start up your new business venture without having to sell your soul. Let us take a look at some of them.

Launch a crowdfunding campaign

Crowdfunding is becoming an increasingly popular way of raising money, and that is because there are so many success stories with it. It is a case of having the right business idea and the right pitch – get those right and you will have hoards of people wanting to help you out financially.

Using a crowdfunding agency gives you the chance to connect to people with like-minded interests and knowledge that you may not otherwise be in touch with. It also allows you to get an idea of the level of interest in your product or service and what resonates with people who may be your target audience. It also gives you an opportunity to practise your pitch and your marketing campaign and tweak it for the future. Most importantly, it helps you raise the capital for your new venture.

Find an angel investor

The general definition of an angel investor is an accredited business person or individual with a net worth of more than $1 million, or an annual income exceeding $200,000. In most cases, they work alone, but at times will work alongside other angel investors to build up a fund.

An angel investor works by providing capital for the business start-up in return for convertible debt or ownership equity – imagine along the lines of Dragon Den. These are usually used when a traditional investor will not take the risk.

Ask family and friends

Many people turn to family and trusted friends when they are trying to raise the money to launch a new business venture. According to the Global Entrepreneurship Monitor, 5% of US adults have invested in a company started by someone they know. It is a tricky one though because it relies on a huge amount of trust and faith. You need to treat it like any other formal business transaction – draw up legal contracts with clear rules on how the money should be paid back, the time frame and what will happen in the case of late or missed payments. Be aware that it a risky way of getting capital, as if things do not work out as you hoped and you find yourself unable to pay the money back, it can irreparably damage your relationship.

Raising money to start your new business venture does not have to involve countless trips to that bank and meetings. It can be much more straightforward than that. The key is to have a solid business idea and a business plan to go with it.

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