Bootstrapping, in other words, self-funding your startup, is an incredibly mammoth task. For any budding entrepreneur who is trying to get into the startup way of life or even those established entrepreneurs that need a massive windfall to fund something like a new product or changing business location, there are many difficulties across the board. And, as the vast majority of us aren’t able to pick money off that magic money tree, what is there available for us to fund our burgeoning startup company?
Keeping That Day Job
This isn’t always music to entrepreneurs’ ears, but funding a startup is a long game, and although you require this idea of freedom, it’s a bit foolhardy to jump from a full-time job into a full-time entrepreneurial career, when you haven’t got the funds to back it up. Of course, if you are willing to make the sacrifices, there are things you can do, such as sell your home. And if you need to sell your home in days, not months, there are ways for you to do this, meaning you will get a quick injection of cash if you need it. But, remember, these precarious positions, at the very outset of any company can go one of two ways, success or failure. It’s up to you to really decide if you are willing to sacrifice a lot to fund your startup. Lots of people wouldn’t go this far, and for those people, it’s recommended that they stay in their job and build up the company on the side.
The Modern Alternative Ways
While you could go to banks to borrow money, a lot of banks aren’t willing to lend to the budding entrepreneur, especially if there is a bad credit history or track record of finances aren’t the most reliable. So, your other options are few but resourceful. Peer to peer lending is something that is usually more expensive than bank loans, but, when you weigh them up in comparison to payday loan firms, you are still getting a better deal. Invoice factoring is another one of these options, but this is only feasible when your business is up and running. There is also revenue-based financing, which has shown its worth in tech startups. There are also angel investors; these are people who have been in your position, so it does make the pitching process a bit easier. But these angel investors will have a stake in your company. So, if you’ve got the next Google in your midst, this could be a problem trying to get those shares back further down the line.
The idea of funding a startup quickly isn’t always that feasible, especially if you are viewed as unreliable in the eyes of the banks. So, the best way to tackle this difficulty is to be a bit savvier in terms of how you raise those funds. You may also want to look at the rise of digital currency, such as Bitcoin, and the market for this has never been in rude health. But when it comes to funding your startup quickly, sometimes there are no shortcuts. If you have a dream and an idea you think will go far, the best method is to squirrel away at it, much like your finances.