There are a number of places to get money, and none of them will come easy. Some of the old models aren’t really working and some of the new models haven’t had time to prove themselves.
1. Venture Capital/Private Equity: The idea of setting out on the pursuit of venture capital just isn’t feasible. The number of deals, the bottleneck of those chasing the deals and the consequences of taking that type of money, rarely produce happy endings.
2. Angel Investors. If you don’t already know that angels are real, they are, but they are not holy. They are high worth individuals that look for opportunities to invest in and mentor promising start-ups. But don’t let the name fool you, they are not always angels. For the most part, they are savvy business people looking to use their capitol and someone else’s sweat equity and ingenuity to make more money. There is NOTHING wrong with that, but the term angel might be a bit of an overstatement.
3. Banks/SBA Loans: Formal banks are an option if you are a minority or have assets worthy of lending against. This is a way to bet on yourself and if you have saved or have equity in your home, this might be a very logical way to get the ball rolling. A good banker is not a risk taker
4. Bootstrapping: The money is all around you. Bootstrapping involves the use of your personal assets and your networks money. This includes credit cards, family loans and other bartered affairs. At least the people involved in this sort of funding have a really good idea of the entrepreneur’s personality, character and work ethic. This is important to remember. Don’t go looking for this type of money until you are completely confident that you are as ready as possible to turn this opportunity into a success. You will have to live with these people after the new venture has either made or lost its stake. It’s okay to lose other people’s money just be sure that you can look them in the eye with confidence that gave it your all.
5. Customers are the trendy and healthiest answer to this question. Start selling before you even have something to sell. Let your customer’s orders serve as the capital you need to get started. This is not for every start-up but when you can find a way to make this work, it is certainly an exciting start.
6. Crowdfunding is another trendy answer. There is a lot to be determined as to the legality and feasibility of solutions like Kickstarter and Microventures but the upside sure is exciting. If they ecosystem works out, we might find ourselves playing the role of “shark” and trying to pick the next big winner.
Generally, money is the first obstacle that people identify for why they cannot go into business for themselves. In reality, where there is a will (and value) there is a way. An entrepreneur that lets something as trivial as money keep them from working on their dreams probably doesn’t have what it takes to creatively solve the daily challenges they are sure to face.