As a park lover and blooming conservationist, I am incredibly excited to discover and share the thousands of unique national, state, and private parks that exist worldwide on RealParks.com. Think of all the moments of awe, unplugged quality time, and laughs shared over campfires that we can help deliver to millions of people! However, I have quickly realized that it will likely take decades to bring my complete vision for Real Parks to life alone. I need help. Now that I am looking into funding options, I think this is an excellent opportunity to share this research with you.
7 Ways to Fund Your Business Idea
1. Kickstarter/Crowd Funding
While on a long drive yesterday, we listened to a Stuff You Should Know podcast on Kickstarter. Crowdfunding a likely the fastest way to fund your business idea and, to me, seems to be the best option. You give up no operational control, you keep all the money you raise, and all you need to do is create a compelling pitch and offer a product or service that people want. What a fantastic idea! Crowdfunding is competitive, though, and your vision must impress the Kickstarter team to get published. However, if you are passionate and think your idea could help others, crowdfunding is a great option. While many crowdfunding options are available, Kickstarter, Indiegogo, and GoFundMe are a few excellent places to start.
2. Apply for a Grant
The grant process is competitive and can take a while, but this is a good option if you are not in a hurry. You do not have to repay grants. (Yay!) Private organizations and state and local governments offer assistance to startups to help create jobs and stimulate the economy. If you live in the US and you think this option could work for you, check out the National Association for the Self-Employed, NASE, the Idea Cafe, and the Small Business Innovation Research, also known as SBIR, to find grants.
3. Ask Family and Friends
I would steer clear of this option. However, some entrepreneurs, especially those from wealthy families and communities, have successfully raised capital for a new business venture by asking friends and family for money. I recommend written agreements to help protect the relationship and ensure that everyone is on the same page.
4. Find an Angel Investor
These high net-worth individuals sometimes provide funding AND mentorship. It sounds like a win-win situation! Angel investor networks are also easily found online. However, convincing an angel investor that you are worthy of their money and time is challenging. Be prepared with a fantastic pitch.
5. Apply for Venture Capital
If you’re ready to scale your organization quickly and have a polished business plan, venture capital could be your financing tool of choice. Although VCs occasionally fund other business types, software and tech startups are most common. Venture capital funds are pooled investment funds seeking private equity stakes in small enterprises with strong growth potential. It is possible to raise venture capital funds before you earn any revenue or profits. Venture capital funds often hold a board seat and take a more active role in their investments. A simple search for “venture capital databases” will help you get started.
6. Request a Loan at the Bank
If you have solid credit history and a business plan, a bank might be willing to loan you money. However, you will have to pay the loan back with interest. Advantages include retaining full equity in your company and the ability to get a lot of funding quickly.
7. Raise Money Yourself
According to some estimates, almost 90% of entrepreneurs raise money themselves by selling possessions, working extra hours, taking out a second mortgage, and budgeting more efficiently. While this option is preferred, it is crucial to logically think through how much money you will need and how long it will take you to earn it yourself. We can go faster and farther together than we can on our own. How quickly does the world need your gift?
Before seeking capital, take the time to weigh the pros and cons of each option and think through what will work best for your family and business idea. Starting a business is a risky proposition, but we can significantly reduce our risk by being smart about all the seemingly insignificant decisions we make now. You might have to try a few of the options above before finding the right financing option for you. I am leaning toward Kickstarter, but we will see what happens. I would love to hear your thoughts on funding, so please leave a comment below.