So you have an idea – a great idea. You want nothing more than to dedicate yourself to realizing a vision that could make a difference in the world. You’re sure that your business could fly high if you could just get it off the ground. But you don’t have the money to get started, and now you’re mired in the difficult world of fundraising. Don’t despair: it’s a manageable challenge, and there are ways to move forward if you do so skillfully. With a great idea and a lot of hard, smart work, you can find the funding you need to launch your business.
Marshall Your Own Resources
The first step is you. If you’re not willing to put your time and money where your mouth is, how can you expect others to do so? Before you start asking people for money, make sure you’re confident and committed enough to give it your all. That means managing your financial life with an eye on the prize: save, scrimp, and sell what you can to get started. It’s the first way of convincing others – and yourself – that you mean business.
Don’t Start with Crowdfunding
Although crowdfunding through sites like Kickstarter and Indiegogo can be a great way to go, it shouldn’t be your first stop. In fact, according to an article in Forbes, most entrepreneurs have already secured various types of funding – through loans, personal savings, and other methods – before they engage in crowdfunding efforts. In a way, that was what set them apart. People recognized that they were serious entrepreneurs who were on their way, and it made an anonymous donation seem more legitimate. Make sure you’ve already started down your own fundraising path before getting online; it’ll give your business a lot more respectability.
Move in Concentric Circles
The best approach to targeting investors is to move outward carefully, one level at a time. Start with your closest friends and family, then friends of friends, then your local community. Strangers and financial institutions should come later. Remember, as you move further from your comfort zone, the risk associated with your venture will go up, and implications will become more serious. Friends and family don’t generally set high interest rates or demand a tight schedule for return on investment, but banks offering small business loans often do. It’s better to secure as much funding as you can from a tightly knit community of stakeholders before seeking out professional funding options.
Keep Your Passion Front and Center
You wouldn’t be going through the hectic fundraising process if you didn’t care deeply about what you were doing. Yet many entrepreneurs believe they should affect a distant attitude towards their work for fear of coming off as less professional. In point of fact, investors rank passion as among the most convincing factors that lead them to contribute. They want to feel how much you care about what you do, so don’t suppress your passion; embrace it. If investors feel that you’re guided by a whatever-it-takes attitude, they’re more likely to think you’re in this for the long haul. It takes a lot of energy to build a business, and it will greatly help your cause if you communicate to your investors that you have the determination to go the distance.
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