Get Funding For Your Big Idea: How Do You Get Your Product or Startup Off The Ground
It’s a common situation for an entrepreneur – you have a great idea for a product or startup, but you don’t have the money to get started. Here are a few ways that you can get funding for your idea: Bootstrap It The first option you should consider is paying for it yourself. When you bootstrap your idea, you retain full control of it and you don’t end up paying any interest like you would on a loan. The problem with this method is that it can take time to save up enough money. One way to alleviate this issue is to start on a smaller scale, and then reinvest your profits back into your business, steadily growing as you make more money. Find Angel Investors Angel investors are people who invest money into your business in exchange for a stake in that business. There are quite a few sites online that can help you connect with angel investors. The two things that angel investors tend to look at when deciding where to invest their money is the business idea itself and the people behind that business idea. This means that even with a great idea, you’ll also need to strike angel investors as the type of person who can make your idea happen. The downside of turning to angel investors is that you’ll be giving up a portion of your business in doing so. Business Loans The traditional method of starting a business is a business loan, but these are hard to obtain through banks or credit unions. Those financial institutions usually only want to lend to you if you’ve already been in business and making a profit for one or two years. Fortunately, there are other loan options available. One type of lending that is growing in popularity is peer-to-peer (P2P) lending. With P2P lending, investors fund your loan instead of a financial institution. Their return is the interest you pay on your loan. While you won’t get an interest rate quite as low as you’d get at a bank, P2P loans can be
easier to get. You’ll still need a good credit score and financial profile to quality, though. Finding the funding method that’s right for you depends on your current situation and how quickly you want to get your business launched. Bootstrapping is always a good way to start, especially if this is your first venture, but loans and angel investors can also be good choices. Daniel Palmier is a leading Boston CEO, Real Estate Investment Manager, and Founder of UC Funds.