Every startup knows that in order to start seeing a profit margin, it takes a lot more than just a brilliant idea. In recent years, startup culture has been celebrated for boosting overall innovation and flexibility within the business world, but it has also been subject to various misconceptions. Stories of unicorns and entrepreneurs who catch the eye of a big name investor, earning millions overnight, have led many startup hopefuls down the wrong path.
To avoid putting the cart before the horse, early stage startups need to be aware of all the options available, and when it comes to financing your startup, there are several innovative ways that can help you turn that brilliant idea into a reality.
1. Reach out to your peers
Understood to be one of the more flexible platforms for startups to increase their financial prospects, peer-2-peer lending has created space for small companies to raise capital without having to go to the bank. Removing the presence of an official financial entity, individuals can interact on a personal level with their borrowers and are able to seek out addition sources of funding if needed. Lending Club is a leading example as one of the world’s largest P2P lending platform, which provides loans from individuals and SMEs.
2. Industry specific grants and loans
Startup culture has had a major influence on the global business world. With many cities around the world investing in technology, and local startup ecosystems, there are more local initiatives that aim to support local SMEs and startups than ever before.
Programs, like Virgin Startup, focus on local entrepreneur needs and, in addition to financial help, provide mentorship as well. And it’s not just private companies that are lending a hand, government entities are also offering funding schemes. The European Small Business Portal is a scheme funded by the European Union that offers both direct and indirect funding as well as alternative resources.
3. Crowdfunding is still a thing!
In 2009, a company was launched that changed the way creative enterprises, like startups, and independent entrepreneurs do business forever. That company was Kickstarter, a crowdfunding platform that has generated over $5 billion in direct economic impact for both creators and their communities. Over the last five years, crowdfunding has been all the rage and has led to startup-specific crowdfunding sites. Platforms such as AngelList and Crowdfunder focus on helping small businesses get their names out there while focusing on industry-specific needs, such as launch costs, raising capital and carving out a sustainable business plan for your company.
4. Invest in an expert
While consulting an expert isn’t a direct way to fund your startup, it’s an effective way to increase your chances of acquiring financial assistance, especially if you’re looking to get your hands on some venture capital funding. Financial consultants know the language of money and can help guide your startup in the right direction, creating financial guidelines that will help you both attract and retain investment in the long run.
From crowdfunding to working with contractors, startups today have a myriad of options that they can explore that will increase their chances of financing their idea. The above steps are both practical and flexible, which not only helps in the early stages of development but also encourages long-term financial growth.