So, you’ve now written your business plan. You’re ready to launch, right? Very far from it! You’ve told your story on paper. Now that story needs to come to life. From this point out, it’s a choose-your-own-adventure story. Here we go…
Do you plan to bootstrap your company or obtain outside funding?
This means that you will be funding the company with your own assets, rather than seeking money from outsiders. This is frequently the more difficult approach; but, in the end, you have complete control of your company. If you go with this route, you may be forced to start small and generate capital as you go. This isn’t a problem, and it’s totally doable; but you should consider how quickly you want to grow and if your available funds make that possible.
If you decide to go with outside funding, you have all sorts of options: loans, angel investors, venture capitalists, and sites like Kickstarter.
Loans There are a plethora of loan types out there: business loans, personal loans, home equity loans, and secured lines of credit.
Angel Investors Angels are wealthy individuals that provide money to finance your business. These individuals get into the game for different reasons and will expect varied levels of involvement in your business.
Venture Capitalists VCs tend to be a bit more picky than angels. Only 4 out of 1,000 companies who pitch receive funding from a VC. You have to be at the top of your game to experience success in this space.
Start-Up Sites Start-up sites like Kickstarter solicit funding from a large community. If a company contributes their idea to this space they have an opportunity for all-or-nothing funding from the general public.
We’ll talk more about funding options next week.