If you are wondering how to get funding for startup without giving up equity then you are in the right place!
Starting a business is not everyone’s cup of tea. It requires time, patience, and effort. When you start a business there is a lot going on your mind. You would be thinking of ways to get funding for your startup. You might wonder how to get funding for a startup without giving up equity. And it’s possible!
You tried your best and raised capital, but the interested investors took away your company piece by piece! You want to find ways that don’t require giving up the equity.
There are several ways that can be of help such as asking friends and family members! You can also consider crowdfunding.
Let’s discuss how to get funding for startup without giving up equity in detail.
Ways to Getting Funding for Your Startup Without Giving Up Equity
It’s possible that you could be a beginner and might not understand some of the terms here such as equity! It’s the owner in terms of shares or percentage that you have with the company. So when you ask for a loan or anything from the investors, they would ask for equity in return for the amount they are ready to loan you.
Be prepared to get an answer to how to get funding for startup without giving up equity. Consider the following;
#1. Ask Friends And Family Members
Yes, you read that right! If you are looking for ways to get funding for your startup without giving up your equity then consider asking friends and family members to help you. It’s possible that someone from friends or family members would be willing to give you an interest-free loan.
It’s also possible that you have a generous family member who is willing to help you without getting anything in return. It can be a win-win situation. Your mom or dad can gift you the money you need! You never know what’s possible until you ask.
This option might come as a surprise for you, but it’s possible that someone you know could be there to help when you need it the most. Your mom and dad could be generous and would give you all the amount that you need! If that happens you would be lucky as you would not need to go through any hassle.
It’s also possible to ask for a loan from loved ones, but without interest so that you can easily pay it off when the times are right.
#2. Use Your Savings And Assets
It’s possible that you are passionate about your startup. You want to try your best to get it going! You want your startup on its feet and you are ready to take advantage of your savings. It’s possible that you could be saving for years.
Now that you are sure of the success of the business idea, you are ready to use your savings for the startup. You might be doing a second job for your business. In any case, you would be relying on your own self for raising the capital you need for your startup.
You might also have the assets. It’s possible that you could use your savings and assets for your startup. If there are partners involved, everyone can pitch a certain amount for the business. You can take this route when you are ready!
You might want to save for the rainy days, but you are also passionate about your new company that’s in the infancy stage and require funding for growth and success.
#3. Consider Crowdfunding
You might be aware of the concept of crowdfunding that’s gaining popularity nowadays. It’s a practice through which you can collect a small amount of money, but a large number of investors are involved. In fact, a quick search can give you numerous success stories of crowdfunding.
There are many things to keep in mind when you are taking the route of crowdfunding. Your campaign has to be genuine. Try doing it from the core of your heart and with full dedication to get the desired results. You never know how much capital you would be able to raise for your company.
It’s also possible that your business might not be suitable for crowdfunding, so you have to check thoroughly if it’s a viable option for you or not. If it is then crowdfunding can be a good way of raising the desired capital.
#4. Consider Contests
As a founder of the company, you would be looking for ways that can help you raise money for your startup. You can take a look at the contests in your area. It’s possible that there could be a competition for the budding entrepreneurs that would be suitable for you. Check out the do’s, don’t, and the rules and regulations of such contests.
It’s important that you have a business plan. When you have a solid business plan, it becomes a lot easier to explain your idea with numbers.
Plus, you should practice an excellent elevator pitch. Think about it! Why should anyone give you money for your startup without expecting anything in return!
#5. Check Out Grants
Getting grants would be like getting free money, but you have to fulfill certain requirements for that. You have to see what programs are offered by your government. It’s possible that your government would be supporting certain ideas.
If you are a woman who is trying to start a business, it’s possible that grants would be available for you. Sometimes you have the resources available, but you are just not sure where to look for them. You can ask people if they have any knowledge, especially those who are running a small business.
It’s also possible that you would get a mentor to guide you for the business. Depending on where you live, you have to see what grants are available.
Tips to Keep In Mind When You Are Looking for Financial Support for Your Startup
Finding financial support for your startup without giving equity can be quite challenging. However, it doesn’t have to be especially if you are up to date.
If you are keeping pace with the fast-changing world then it would be easy for you to capture the attention of the potential investors who are willing to help without asking for equity in return.
Keep the following tips in mind:
Maintain An Online Presence
It’s important that you are maintaining an online presence. Nowadays, a virtual presence is a must. If you are not present online then chances are that people might consider you, your profile, and your company shady.
Social media is playing an active role in maintaining your online presence. In fact, it’s a great way to connect. You can connect with the audience and also with potential investors. You have to be smart when it comes to the promotion of your company. You have a chance to impress the audience through social media.
Follow Rules And Regulations
Follow the rules and regulations of your state. Register your business and get the required licenses. You want things to run smoothly and that’s why it’s important to be aware of such matters. If you are a beginner and have no idea, it’s best to consult with a professional.
Many people are not aware of the rules and regulations of the business. Later, you would know! It’s true that you can learn from your mistakes, but why make mistakes in the first place.
Before starting your business, it’s best to do thorough research on the business idea. You should know what to expect so that you feel ready for the coming challenges in your life.
Aim for Higher Ranking On Search Engines
When people search for you or your business, it should show up on the search engines. That way you can create credibility, especially if you consider crowdfunding.
If you are a beginner, but you are creating a blog for your business or maintaining an online presence, you can build a fan following. When more people trust you, it would be easy to create campaigns and get the desired results.
Think about it! If no one knows or trusts you then why they would be willing to help you in the first place. If your blog or website is ranking higher in the search engine, then it shows your credibility. Thus, it would be easy for people to trust you.
You should be a transparent person. It’s important that you are trying your best and you don’t have a hidden agenda for the business. If your business is shady then why would anyone consider it for crowdfunding or investing? If you follow ethics then it would eventually show!
Your business should have a purpose! It’s best to create goals for yourself and also for your startup. Life is not just about making more money! There is more to it.
It’s important that you follow ethics in your dealings. When you give priority to ethics then everything (business and life) can be a lot simpler and easier.
Do A Thorough Research
It’s important to do thorough research before you opt for a way to raise capital for your business. What works for one person might not work for the other! Thus, you have to see what’s the most viable option available to you.
List out the pros and cons of the options available to you. When you know what works for you, it would be a lot easier for you to make a final decision.
Ask for Help
It would be easy for you if a friend, family member, or spouse is supporting you for the startup. It can be a hassle to deal with the loans and other means, but if someone is willing to help it would be a viable option. In fact, you might not feel like it, but you can ask for help and see if it works for you.
Not everyone is ready to ask for help! In fact, for some people, it’s hard to ask for help in the first place. However, there is no harm in asking for help. If you are lucky to have the right people in your life then it would be easy for you to maintain your business later also.
Consult Financial Experts
In order to learn how to get funding for startup without giving up equity, it’s important that you take legal and financial advice. You have to consider what the experts are saying before making any financial decision.
The experts have sound knowledge and can guide you better. It’s possible that you might not be aware of many things and you would learn about them through the help of the financial experts.
A financial expert would be able to tell you ways that you might not be aware of! You never know what possibilities are there unless you ask someone. It’s good to be aware of the options available to you so that you can make the most of them. A financial expert can be your great source of information.
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Wrapping It Up
You could be hardworking and trying your best to raise capital for your startup. You want to know how to get funding for a startup without giving up equity. In fact, you are desperate to learn about it! There are several ways that can help, but it’s important that you opt for the one that’s easy and manageable for you.
Starting and maintaining your business would require your time, effort, and money. You have to raise the capital but in a smart way so that you don’t give up a major portion of the ownership. It’s important that you consider legal and financial advice before any move as experts have the best knowledge to guide you better.