Amazing Ways to Finance and Grow Your Startup
What’s the toughest part of being an entrepreneur? Raising funds is probably one of the hardest exercises when beginning your own ‘shop.’ In today’s tough economic conditions, cash tops the list of the scarcest items (lack of sleep often rivals this).
Unlike the common misconception, entrepreneurs need not raise a great deal of upfront capital. However, where it is inevitable, businesspersons need to be clear on why they need the money and demonstrate that they have exhausted all other avenues before they seek external funding. Below are amazing ways for you to finance and grow your startup.
First, Show that You Believe in Yourself
Before you think of external financing, have you exhausted the funding avenues available to you? It is hard for another party to partner with you in business if you cannot display your financial commitment to the firm. You can do this by tapping into your savings, getting a home equity loan or dip into your retirement fund. Sounds, too risky? Not so, such a move indicates your commitment and confidence in the business.
An excellent source of funding for private home owners (non-HDB) is the low rate home equity loans offered by most Licensed Money Lenders in Singapore who lend based on the present market value of the property.
Peer-to-peer (P2P) lending and Crowdfunding
Peer to peer lending entails the matching up of investors and entrepreneurs in a particular industry. P2P has gained popularity in Singapore partly because of the short time within which businesses can access funding. However, strict regulations limit its growth by restricting its availability to local Singaporean firms.
Crowdfunding is similar to P2P lending. However, the moneylenders are more than just one or a few “peer” lenders. The investor constitutes a “crowd” and applies to ventures where the entrepreneur is popular and can marshal up a“crowd” of fans or friends who would buy into the idea and finance its production. If your idea is irresistible, crowdfunding is an amazing way to raise capital, promote the product online, take orders and in some cases pre-sell products before manufacturing.
Angel Investors are affluent individuals or a network of well-off persons who finance startups. They seek to invest in companies while at their early stages and participate actively building a successful business. Their main concern is the return on investment (ROI) and your exit strategy.
Angel investors demand equity ownership in exchange for their funding. As co-owners, they play an active role in business development thus add to you the fiduciary obligation of acting to the benefit of the company keeping in mind the shareholders’ interests.
Venture capitalists are moneylenders who build new startups regarded as both high-growth and high-risk. To meet this criterion, venture capitalists emphasize on particular industries, where they have the expertise and can advise entrepreneurs on the chances of success or what is needed to position the product in the market correctly.
Venture capitalists will advise you on how to increase profitability by managing operations, connecting you to experts and finding the right market. However, they are rarely loyal and are primarily concerned about recovering their investment with profit.
To wrap up, finding the appropriate financing for your startup is both a business and personal decision. The Occam’s razor principle which states that among different theories, the one with least assumptions should be selected ought to be your guiding principle. Therefore, the simplest solution to finance and grow your startup from the above is the best for your business.
Are you are looking for a loan to finance your start up? Unable to get a loan from banks? Consider getting a short term loan from licensed moneylenders in Singapore. Have a look through our list of money lenders to find one suitable for you.
If you have borrowed from a moneylender in Singapore before, drop a review about them here! So that we can help Singaporeans make a decision.