Capital resources: If you’re an entrepreneur, you know that capital is a limited resource. Even if you have a brilliant idea, a strong team, and the passion to execute it, you may not have the cash to get your business off the ground. As such, you need to think outside of the box when it comes to securing your startup’s initial capital investment.
If you’re starting from scratch or don’t want to risk too much of your personal savings on your new venture, gaining access to affordable capital can be difficult. Thankfully, there are various sources of secondary funding for entrepreneurs who are looking for financial assistance in launching their new business ventures.
To help you get started on your capital search, we’ve listed 10 different common types of capital investments for entrepreneurs that you should consider when making your financing decision:
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10 Common Capital Resources for Entrepreneurs: How to Get Your Capital Investment
Capital resources: When starting a business, you need to figure out how to get capital funding. It’s not easy and can be quite challenging. However, there are many resources available for small businesses looking to get the capital they need to start or grow their company. There are numerous options when it comes to getting capital for your business. Here are 10 common sources of capital for entrepreneurs so you can begin planning how to get your capital investment. This is an exciting time if you are thinking about launching a new business venture or growing your existing business. With the availability of online services and smartphone apps, anyone with an idea has the ability to test their market viability before investing significant time and money into growing their company. Here are some common resources that may be helpful as you plan to get your capital investment.
Crowdfunding
Capital resources: If you’re raising money for a specific project, you can use a crowdfunding platform to solicit funding from a large number of people. Crowdfunding has become very popular in the last decade because it’s an easy way for people to pool their money together online to support a project they would like to see created. There are now many different types of crowdfunding, including equity-based crowdfunding where entrepreneurs sell shares of their company to raise money. Crowdfunding platforms have become very sophisticated and provide entrepreneurs with a number of tools to help them run a successful campaign. You can use crowdfunding for a wide variety of projects, such as starting a new business, raising money for charity, or creating a new product. Some of the most popular crowdfunding sites include Kickstarter, Indiegogo, and GoFundMe. There are also specialized sites that focus on certain types of projects, such as science, music, or journalism.
Co-Working Space
Capital resources: A co-working space is an office shared by a group of independent contractors or entrepreneurs. Renting office space is one of the biggest expenses when starting a business, so this can be a significant source of capital. Many co-working spaces are part of a network of shared office spaces that are conveniently located near public transportation, restaurants, and coffee shops. Co-working spaces may charge an hourly or monthly fee for a desk, chair, and internet connection. There are many co-working spaces that are geared towards entrepreneurs. These co-working spaces have a supportive community of business owners who are sharing ideas and helping each other grow their companies. Since many of these spaces have flexible membership plans, they can be a good source of capital for entrepreneurs who are just getting started.
Family and Friends
Capital resources: When it comes to funding your business, don’t forget about the people you know and have a relationship with. Family and friends can be a source of capital for entrepreneurs who have good credit and who have a realistic business plan and timeline. You may be able to get a small business loan from family and friends, but it’s important to have all the paperwork in order and treat it like any other type of loan. Before approaching family and friends, you should have all the details of your business plan and financial forecast worked out. Be prepared to answer a lot of questions and be patient if your family and friends want to take some time to review your proposal and make a decision.
Equity Financing
Capital resources: If you’re planning to start a new business or expand an existing one, you can approach a private investor for equity financing. You’ll have to give the investor an ownership stake in your company in exchange for the money. You’ll also have to give them periodic updates on the progress of your business. Selecting the right equity investor is an important step in your financing process. You can try to find an angel investor, a venture capitalist, or a private equity fund. You can also approach a family office or a wealthy individual for equity financing. If you have a great idea and a strong, proven business plan, you may be able to get equity financing without having a complete business plan. However, it’s important to talk to a lawyer before approaching an investor. You’ll also want to make sure that you fully understand the legal and financial terms of the agreement you sign with the investor.
Grant Funding
Capital resources: If you’re starting a new business or expanding an existing one in a specific industry, you may be able to get grant funding. There are a number of different types of grants available. You can find a grant that matches your business, industry, and project. There are organizations that provide grant funding in a wide variety of industries, including healthcare, education, the environment, and arts and culture. You can find government and non-profit grant-making organizations that provide funding to organizations and businesses operating in a specific region or serving a specific population. Before pursuing grant funding, you’ll need to do some research to find the right organizations that can provide funding for your project. You can get access to grant information from your local libraries, university libraries, or online databases that provide access to grant-making organizations. You can also use online resources like GrantStation’s Funding Decision Maker to find the right grant for your business.
Service Company Fundamentals
Capital resources: Another way to get your capital investment is to take advantage of the growing trend toward outsourcing. The idea behind outsourcing is to turn some or all of your business into a service company. Here are some examples of service companies: These types of businesses provide a service and are not tied to a particular physical product. This gives you the ability to expand your business as needed and make it more scalable as you grow. In order to make this work, you’ll need to ensure that you have systems and policies in place that allow you to scale up quickly. You’ll also want to make sure that you’ve got the right team in place to make sure your customers are happy and that your business is running smoothly.
Small Business Loans
Capital resources: A small business loan is a good option if you’re looking for a fixed amount of capital – such as $50,000 or $100,000. Small business loans may allow you to borrow more money than what you can get from a family member or friend. In order to get a loan from a bank, you’ll want to make sure that you have a business plan and financial forecast with accurate numbers. You may also want to hire a business planning consultant to help you with your loan application. Before you apply for a small business loan, make sure that you understand all the terms of the loan. There are many different types of small business loans, so you’ll want to make sure that you know which one you qualify for and that it has the right terms for your business needs.
Reward-Based Crowdfunding
Capital resources: Reward based crowdfunding is a method of raising funds by giving away products or services in exchange for small donations from people. Crowdfunding websites like Kickstarter and GoFundMe have become very popular for people getting funding for creative projects. Some entrepreneurs are using reward-based crowdfunding to help fund their companies. You may be able to get funding for your company by creating a product as part of your crowdfunding campaign. There are many different types of reward-based crowdfunding campaigns. For example, you might create a product, promote it on a crowdfunding website, and then use the money raised to expand your company. Or you might create a product and use the money raised to help pay off debt or expand your marketing efforts.
Bottom line
Capital resources: Crowdfunding has quickly become one of the most common sources of capital for entrepreneurs. There are many different types of crowdfunding, including reward-based crowdfunding, equity-based crowdfunding, and debt-based crowdfunding. Once you’ve decided on the type of funding you’d like to pursue, you’ll want to put together a detailed business plan. You can also consider getting a small business loan or approaching family and friends for funding. No matter which source of capital you choose, be prepared to follow through on your promises to investors or lenders and make sure that your business plan is sound.