Receiving money to get your business started is one of the most arduous things for entrepreneurs to do. Forbes contributor, Alan Hall gives five suggestions to help guide you through the fundraising process:
Boostrapping: In the process of experimenting for your business, use your own financial resources like personal savings and credit cards, but be sure to use your money cautiously so you don’t break the bank.
Friends and Family: Ask close friends and family to contribute to the company. Before you approach your friends and relatives, decide whether you are asking for a loan or a donation. If you are asking for a donation, make sure they are clear on the fact that they might not get their money back.
Crowdfunding: Under the JOBS Act, crowdfunding grants more options for small investors and removes obstacles, making it a good source in the early stages of a business. This is a great idea if you are unable to receive a bank loan, if you aren’t ready for venture capital funding, or if you’re friends or family are unable to help.
Angel Investors: Once your business begins to grow, “angel” investors can be used for more funding. These people—or groups of people— provide capital for business start-ups, usually in exchange for convertible debt or ownership equity.
Bank Loans & Venture Capital: Once your business has had some time to grow, a bank loan might be needed for operating capital and long-term growth. In order to receive this kind of loan, financial institutions will require several years of financial information on both the business and the business owner. The bank will also want a pledge to secure and guarantee the loan.
Call JacksonWhite’s Small Business Law Team at (480) 464-1111 to discuss your case today.