A Few Ideas For Finding New Business Funding

The entrepreneurs of today are not short of great ideas and wonderful ways of executing plans. But as with most things, without financial support, ventures will fail. That is why it is important to get the funding in place before launching a business. Without the right kind of funding, nothing can be done. However, how does a new entrepreneur who has a lot of promise but no actual result to prove it get the funding he requires? The good thing is that the world is very receptive at the moment to start-up businesses and hence finding the money to launch one is not very difficult as long as one is prepared to work very hard.

Getting a grant

Getting a grant is perhaps the best way for new business funding, if only it were not so difficult to land one! However, getting a grant is possible if one sets up his mind to do it. The good thing is that a grant is free of charge and that is why the money got from it can be used for a business in any way one deems fit. Grants are available based on the theme of business and are given to single mothers, women and minority members of the community. Grant proposals can be quite long and that is why starting on them is a good idea as soon as possible if one is serious about starting a new business.

Getting a loan

The great thing about this kind of new business funding is that there are a lot of specialised loan options available including micro-loans and loans for people who need disaster recovery. These may actually be easier to get than bank loans. Getting a small business loan from a bank is also possible and is actually a viable way of starting a business on the right foot. However, the entrepreneur has to be prepared for detailing all the aspects of his business and telling the bank why exactly his venture has higher chances of success than not.

Angel investing

This is fast catching up as more and more people with money look for good ideas to invest in. However, it is not simply a case of high-net individuals wanting to sink their money in plans which are not worth it. Finding an angel investor may very well mean that a business-owner is prepared to give out a chunk of the company in exchange for funding. Looking for angel investors who are interested in the same niche is a good way of starting out on this path.

Getting a business off the ground is perhaps the most essential part. However, by pitching it in the right way and attracting the right funding, it need not be difficult. The first thing one needs to do is draw up a really good business plan and take it from there. The right business plan will not have difficulty in finding money if it is presented in the best light possible.

Features that Will Help in Obtaining New Business Funding

When startups are seeking new business funding, it is important for them to understand exactly how investors think & analyze opportunities. Though there are numerous factors that investors will take into consideration before channelling any funds into a start up venture, there are 3 aspects that stand out very prominently and a subset of questions follow. However, it is almost mandatory for these three factors to be met as well as agreed upon before they consider the proposal. Here are the 3 points that are a must in any start up sales pitch:

Is This a Future Billion-Euro Company?

Whenever any venture capitalist hears an entrepreneur pitch, this is the first question they are asking themselves. There is a definite chasm in between the way any entrepreneur views his/her company and the manner in which opportunities are analyzed by investors. Venture capitalists have to hit it big and they must invest in companies that will potentially hit the bulls-eye.

They are completely aware of the possibility that a large number of their investments might end up having not-so-fabulous returns and some might even sink to the depths of the ocean. However, potentially, the market size might just support a really big company. If the total addressable market of a startup is only a couple of billion Euros, VC’s are going to cold shoulder it (There are of course numerous other kinds of investors who will show an interest in smaller outcomes). 

What is The Mettle of the Team?

In early-stage startups, the team is the key to analyzing any potential success of the company. Investors will first bet on the team even before the pre-product stage and before any massive product adoption takes place. That is exactly why an entrepreneur with a proven track record has a higher probability of raising capital than one who is venturing into this space for the first time.

Teams who have actually worked together and created and launched successful products are considered to be even better contenders.  Some find it surprising that a pre-product & pre-revenue company receives venture funding. But delving a little deeper will reveal that there is a powerhouse team behind it. Venture Capitalists are top-of-the-rung when it comes to judging and analyzing businesses and their early bet will almost always be on people.

Is this the right time?

This is the last of the triad of basic questions. Venture Capitalists will always consider market timing. They will scope the market and try to ascertain whether the time is perfect for that particular product to be a launched and become a blockbuster. Essentially a VC funded business must be able to attain massive growth very quickly and growth is all about perfect timing.

The fire of disruptive ideas and technologies must also have the right tailwinds for the fuel of their new business funding to generate growth. Entrepreneurs need to understand and then include certain exciting statistics and market data which will impress venture capitalists enough to sink their funds into their business.