How to Fund a Startup and Make it Successful

August 27, 2020
You are creative, you have a genius idea for a product, and you are the master of your craft, but a startup cannot succeed on passion and talent alone. A startup needs financing. So, where can you find funding to make your dream a reality? Once you find your financial footing, how can you begin the process?
How to Fund a Startup and Make it Successful

GET VENTURE CAPITAL FUNDING

"Venture capital is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential." - Investopedia. Gaining the backing of an investor does not always mean cold, hard cash. Venture capital can be any of the following: 
 
Monetary | Money is always the first concern when someone tries to launch a startup. While financial support is practical, it is not the only valuable form of venture capital.

Technical Expertise | Receiving support from an experienced specialist is a valuable gift. Most startups experience many challenges and can quickly fail without the proper expertise.

Managerial Experience | Having someone on your team that is familiar and skilled at managing, hiring staff, etc., is a significant asset when starting a business.
 
Regardless of the form of aid you manage to acquire, venture capital will surely put you ahead of the game in your endeavours. Be sure to do your research and exert caution in who you select as a supporter.

Weigh the risks with the help of the New Yorker, "When venture capitalists take board seats, they are supposed to help guide a company in the best direction. By sheer necessity, though, their most immediate interest is seeing the company grow quickly enough that their equity can reach their own targets. For a young startup, getting bigger faster is not always the best directive."

TRADE EQUITY OR SERVICES

Thinking outside the box can help further your search for ways to launch your startup. Collaborations are the heart of any small business community. For example:
 
Office Space | If you are in the IT or accounting business, you could offer that service in exchange for free office space.

Website/Marketing | In need of a website or digital marketing help? Do you know someone who works in that domain? "See if you can barter with your neighbor who does some freelancing on the side." - Startup Grind.

Again, caution is necessary. Ensure your exchange of services or products is made clear in a contract. While trade is a great solution to start with, it is not a wise plan long-term. Once your income begins to increase, be sure to start paying (and charging) for services. Working hand in hand with other small local businesses is a great way to get your business off the ground and create a thriving, close-knit circle of entrepreneurs.

START LEAN

Approach your startup organically; with a sensible and slow but steady philosophy. "Keeping the business lean and growing organically...holding on to equity, maintaining control and having only your own skin in the game can work wonders in the long term." - Fundsquir. We strongly encourage:
 
Avoid the "Get Rich Quick" Thinking | Immediate profit sounds like a good idea, but unless you magically see an instant, steady cash flow, a crippling nose-dive is inevitable.

Start With The Basics | Start with the bare necessities. Save when you can, and put off the brick and mortar establishment until you've saved enough for a down payment. Hold off on the fancy stationery and order a small quantity of branded stickers, packing tape, or stamps to personalize your packaging. Handwritten notes on a plain notecard goes a long way in showing your customers your dedication. Use what you have until it's absolutely necessary to make a purchase, and opt for quality used items when possible.

Avoid Making Merch | Nothing is quite as fun as ordering products with your brand on it. However, it's an easy way to spend money that you might not necessarily be able to make back. Errors such as typos or a future change in branding can create a loss that a startup cannot easily recover from.

TAKE RESPONSIBILITY

With any successful business comes great responsibility, serious adulting. This responsibility, especially with the case of a startup, is all yours. You cannot expect to lean on anyone. This means:
 
Use Your Own Money | You need to bring what you have to the table. You cannot expect others to put their funds on the line if you haven't. Putting your own money into your project is also a sign of your dedication and passion. "By going it alone, you'll retain complete control and be unburdened of the interest and strain of other avenues. And this decision has a precedent: over 90% of startups get up and running without the aid of loans or grants." - Forbes.

Always Pay Your Employees | If you need to hire employees, they need to come first. You cannot expect their loyalty, nor should you, for nothing, especially when the cost of living is skyrocketing without mercy. Great employees equal a great business. Even if it means you need to forgo your cut, pull back on hours or purchases, always, ALWAYS, pay your employees and pay them on time.

CONSIDER CROWDFUNDING

Crowdfunding is a fun and practical way to get your startup going. It also helps to form a communal feel and genuine loyalty around your brand. "Also keep in mind that crowdfunding is a competitive place to earn funding" - Profitbooks.net Here are the leading platforms for crowdfunding: 

For more advice on starting your business, consult 5 Essential Tips to Start a Successful Business Without Money here.

Are you in the process of starting your own business but have experienced a slight set back? 24Cash is a local business that provides quick cash advances to Canadians. Find the best loan that works for you and pay it back over 90 days. Get started, apply now

Get a quick $500 cash loan to repay in 3 months. No credit investigation.
Apply for a loan