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# 5 Ways To Fund A Startup

Posted on April 25, 2018 by admin

Stating your own business is never easy. There are so many things to think of, so many pitfalls to avoid, so much research to be done and so many ideas to be vetted, that you can often simply get lost in the shuffle, and feel a sense of dread come over you.

One of these dreadful things you need to keep in mind is how to finance your new business venture. And while there are countless articles online about the same topic, we decided to add another one to that noise, and see how we can help you out with our own ideas.

## Option 1: Angel Investors

An angel investor is just that, a kindhearted person who can help you out and save the day. Even the simplest thing like covering your expenses can do wonders for your business growth. The trick is of course to find this generous individual who is going to invest their money in your venture, and not someone else’s.

These people are not usually after the run of the mill type of businesses that are not likely to turn a profit down the line, so bear that in mind when you do manage to secure an interview with one.

## Option 2: Factoring

Invoice factoring is not an option people usually think of first. It is selling your receivables (outstanding invoices) to a factoring service for cash, for a certain fee. This can be an expensive choice, and the rates can be around 2% for 30-day cash, which amounts to a 24% annual interest rate.

Nevertheless, if you are in need to fast cash to tie you over, this can be a great option.

## Option 3: Applying for a Grant

Depending on where you live and what amount of money you are looking to raise, as well as the line of business you are in, you can apply for a government grant, which can help you get started with your ventures.

There are also grants for specific types of businesses, like those run by women entrepreneurs, those doing specific research, and so on. Applying for a grant can be tricky, so finding all the support you can get can be a huge help.

## Option 4: Business Loans

Taking out a loan is often the most popular choice when you are in need of funding. Even as it can be a huge help in your early stages, getting a bank loan is not as easy as you may think.

The interest rate is also not something you will definitely like, as depending on your line of work, it can be rather high, so you can choose turn to other lenders. Each country has a different process for this, so you should make sure you do your research well beforehand, to find the best option, and make sure you are not being swindled.

## Option 5: Crowdfunding

A relatively new but still rather popular way of funding a business, crowdfunding is another great option you can turn to. It implies securing your funding from more investors, which means they can all contribute smaller amounts of money. This is often easier than chasing down one person who is ready to commit to a larger sum.

There are platforms that can help you out in this effort, such as Kickstarter or the popular Indiegogo. Crowdfunding is also a great way to test the waters and see how many people are interested in your idea, and what kind of support you can hope to generate.

We hope these five ideas have started you off on the right path, and that you now have more ideas as to where to find the funds for that great business idea that has been rolling around in your mind.

## One thought on “5 Ways To Fund A Startup”

1. Great ideas for everyone who is planning to open a startup.

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