5 Options for Acquiring Startup Capital

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5 Options for Acquiring Startup Capital

Winnercoz
| January 07, 2021 Last Updated 2021-01-07T09:26:27Z

 


The economy needs new small businesses that can meet the changing needs of current consumers. Establishing these businesses can also make a stable income for more people while creating jobs. The biggest challenge of starting a business is obtaining startup capital. To assist with this issue, here are five ways to acquire startup Capital.

Angel investors

Angel investors are individuals and investment firms that provide capital to entrepreneurs in exchange for a share of the profits. These private investors are looking for businesses that can grow to make the money they invest work for them.

The additional benefit to angel investors is many of them ask for a small percentage of the company with their financial contribution. It can be beneficial because this gives them a vested interest in your success, which may give you a source for other resources. In some cases, businesses may need more than just startup capital in the beginning.

Loans

Business loans are a popular way for small companies to get the capital they need to make various improvements and upgrades. But while traditional business loans are advantageous to established enterprises, they’re almost impossible to secure for inexperienced entrepreneurs.

Many aspiring business owners turn to personal loans to help fund their startup dreams. Whether it’s small loans in Brownsville Texas, or sizeable financing in New York, the quality and quantity of borrowed startup capital will depend on several factors. While the amount borrowed and repayment terms will vary, the viability of personal loans as a means to fund a startup remains the same.

Family and friends fundraiser

Another source that may be a bit underrated is the family and friends approach. Currently, there are multiple outlets that you can set up, identifying a goal of the amount of capital you are trying to raise and a single location to make contributions.

Although it's not a guarantee that the funds sent to these sources are tax-deductible for the contributor, you will not run the burden of giving up a percentage of your company or have a payment that you will need to make on the money received. It can be a fast process if you have wealthy friends and family in your network.

Savings

Even though this option could take a little longer than you may want it to, the benefits of saving money to start a small business are plenty. What’s more, you may be surprised by how much-unexpected income you receive if you add that money to savings.

Extreme discipline is the key to this method. Having the goal of starting your own business could be a motivating factor in reaching your goal. There is also the added benefit of earning interest on the money you are saving. It may also help to open a business account and deposit any saved money to that account.

Liquidating personal assets

This last option may be more useful if the item or items you are liquidating will give you all the capital you need. You do not want to be in a situation where you sold your car or house, and you wait so long to start your business that the money goes to something else. The money you receive from selling your items may work harder for you when your business begins to generate a profit. Whatever you sold, you will be able to get a better version long-term.

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