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How to Raise Capital For Your Innovative Start-Up Idea

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When you have come up with a business idea and have no capital, you should never give up on it. There are plenty of plans you can put in place that will enable you to come up with the capital you require for your idea to come to fruition.

There are plenty of entrepreneurs in the world that are extremely smart and industrious but are unable to come up with the start-up capital to fund their incredibly genius business plans. These ideas, unfortunately, may die without ever coming to fruition.

You do not have to be like them. If you try any of the following plans, you can be able to the start up capital you’re perhaps in desperate need of.

Getting a bank loan:

Most banks are actually quite willing to fund a start-up business by issuing what they call start-up loans.

You must, however, have a solid business plan, and the plan should be structured very well and it must convey things such as profits projections, modus operandi- the way in which you shall do the business, and the time in which you are anticipating to get a full return on your investment.

Crowdfunding:

This is the process of raising funds online. You do not even need to be tech savvy to be able to use this method, as most people are always online. Here is the procedure of raising funds through crowdfunding:

Pre-launch campaign: Prepare a pre-launch campaign with information about your business, and come up with ways in which you shall engage people. This should include the social media platforms you shall use for the campaign.

Find a target audience: The key is to identify the right people and recruit them as ambassadors for you. Word of mouth will help you initially to spread the word about your campaign in a budget-friendly and trustworthy way.

If you are able to grasp an audience even before the launch of the campaign, you shall have a greater advantage.  You can use platforms such as Twitter, Facebook, Instagram etc., to advertise and get the word out there.

Use Facebook ads for email people: With over 2 billion Facebook users, this is the best platform to market your campaign. Let your ads target a specific audience and ensure to get the maximum number of sign-ups. The beauty of Facebook is that it allows you to target your audience using demographics, gender, age, location and so on, which makes it a great platform.

Create a newsletter: Statistics show that newsletters are still the no.1 most effective method of getting people to take action. Come up with a newsletter to alert the public or let them know what you are about to do. This will enlighten them on your upcoming campaign and can also be the source of the initial sign-ups.  Use any method possible to let the public know. Nothing is outdated.

Nurture your subscribers:  Once you have your first start-ups, now nurture them into ambassadors. Send them several emails before launching the campaign, and ensure your story is presented and your position valued by each one of them. Go a step further and connect with each of them on a personal level so they understand your story more intimately.

Seeking an angel investor:

Angel investors are people with plenty of money and are basically willing to invest in new business ideas. This is what you see in the popular TV shows “shark tank” and “dragons den”.

What you need to do is prepare a business plan, and visit the investor with a clear analysis of what you need, how you are going to achieve your goals and the length of time you need to make enough money in order to pay them back.

If your idea is good enough, you may just end up with an investor, but, bare in mind that they will sometimes want to have a piece of your company, or they may even decide to buy it from you.

Get a loan from a Microfinance Institution:

This is yet another option you have in your hands. The beauty of a microfinance institution is that it offers a much lower interest rate compared to the banks. You may, however, require to become a member of the institution first, and even save some amount of money with them before they can trust you with a loan.

This would be a wonderful idea, if you have some cash at hand, so you can save in the institution before asking them for a loan.

Seek venture capitalists:

Venture capital is a type of funding that is available to new and growing businesses. It comes from venture capital firms who specialize in funding new and high-risk business ideas. In this process, the firm will offer start-up loans to new firms in exchange for equity.

It is not always easy to find a venture capitalist who is willing to invest in your business idea because they ideally look for the next big thing, and as such, many entrepreneurs find themselves bending backwards in order to showcase their ideas as bigger than it probably is.

This is also a short-term investment, and the capitalist will want a return on their investment as quickly as possible.

Pursue a grant:

You can opt to source for a grant from the government. Most governments have money set aside to fund new business ideas. These are loans offered at low-interest rates and given a long repayment period. If you are lucky enough to win a grant, it is one of the best ways to raise capital for your new idea.

But the process is normally very long, and the competition is extremely high. The number of people trying to win a grant from the government is high, and the money is too little to accommodate everyone, and therefore your chances may be extremely limited.

Conclusion:

The above are some of the ideas you can employ in order to source for funds to start your new business. If one doesn’t work, do not give up, just try the next one, and the next one, and the next one, until you are able to find what you need to start your company. The key to this process is never giving up, because you may not know exactly what you have in your hands until you try.

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