Just a few short years ago, our economy took a turn for the worst leaving unemployment rates at historic highs with millions of Americans facing financial troubles stuck and looking for work. What prevailed from this economic downturn was a lot of people betting on themselves, going against the grain, and following their entrepreneurial dreams. These people decided to start a new business as opposed to them relying Corporate America to provide that guaranteed and seemingly secure future.
One of the toughest barriers of entry for any entrepreneur used to be knowledge — or lack thereof. Access to all of the information of the world literally sits in the palm of our hands now in the form of our smart phones. With news of Silicon Valley startups being acquired for billions, it left a lot of people thinking, “How are companies with zero dollars in revenue getting acquired for billions? I like billions of dollars, I can do that too!” After taking some initiative to learn what’s needed to turn their idea into a business, entrepreneurs face the next dreaded barrier of entry, funding.
It doesn’t matter if you’re a brand new entrepreneur or a seasoned veteran business owner, growth can and will require funding. The funding needed to get the business started or keep the business running is usually not within arms reach for the person in need. Traditional methods for acquiring funds sometimes present outlandish restrictions and firm terms. This is the stage where a lot of people give up but do not fear, there is still hope!
These are some alternative methods to consider for acquiring the funding needed for your existing business or startup:
1. Ask friends and try obtaining capital using Crowdfunding!
The same way Netflix emerged and crippled Blockbuster’s business, crowdfunding platforms recently arose bringing to market a new method of acquiring funding that has once never existed. It’s a method of funding born through the rise of social networks, smart phones, and the instant access to information. Everyone is connected these days so connect those people to your idea and ask them for a small reasonable amount of money to help fund your dream. It’s a concept that has successfully helped to fund products that may have otherwise been turned down by traditional sources.
Did you know that more than $20 billion in funding transactions will occur globally through crowdfunding in 2015 based on trends from the past three years. This doesn’t mean that everyone has the ability to receive the funding needed from crowdfunding platforms. As of the beginning of 2015, the total number of unsuccessfully funded projects on just Kickstarter was 116,893. The number of projects that were 0% funded was 22,826 up to this point. Nothing in life is guaranteed, especially when you’re on the hunt for funding!
2. Your 15 Minutes of Fame could be Life Changing!
Seems ridiculous that you would turn to a television show to obtain the funding needed for your business but it’s happening. To date, the Sharks on Shark Tank have invested a total of $44,215,000 with the average deal totaling $164,738. The success of Shark Tank and growth of the Shark Tank Nation now provides another never before seen way of obtaining the funds needed for your business. Just take a look at one of the most recent companies to enter the Shark Tank who for twenty years worked to build their product but faced a daunting uphill battle when it came to funding.
New shows have also emerged such as The Profit where Marcus Lemonis personally invests in failing businesses in hopes of turning them around. Bar Rescue starring Jon Taffer offers a similar deal giving failing bars one last chance to turn their business around before they have to close their doors for good. Restaurant Startup is also on its way to its 3rd season where Restaurateur & TV personality Joe Bastianich and chef/restaurateur Tim Love vie against each other to invest their own money in food concepts they believe will make millions. Expect to see more shows like these emerge.
3. Got a Great Idea? Compete and Prove it!
The TechCrunch Disrupt event features the Startup Battlefield where entrepreneurs have the chance to fight for the coveted Disrupt Cup and a $50,000 check! Thirty companies, chosen from hundreds of applicants, pitch their products live on the Disrupt stage in front of a panel of expert judges, press, live audience of thousands and an online audience of millions. That is only one of the many competitions that exist like this all over the world. So if you have a great idea, and it’s actually a great idea, get out there and prove it!
4. Knowing the Right People Sometimes Pays Off…
Seek out financing from an Angel Investor. These are affluent individuals who can solve all of your problems with one piece of paper from their checkbook. With the success of the before mentioned reality shows, chances are that coming across one of these individuals or groups may turn out to be easier than ever before. What you are still up against, much like the traditional outlets, is having to convince one or a few persons to invest in your idea and with that sometimes comes strict guidelines and also large equity stakes.
5. Not Sure Where to Start or What to Do When You Start?
If your idea or startup fits the mold, a business incubator may also be a great option to consider. Sometimes a cash infusion does not solve the problem getting your business to where it needs to be. A business incubator will provide the funding, guidance, business knowledge and know how to take your idea from nothing and turn it into something.
6. Merchant Cash Advance:
Current business owners who are seeking capital for their business may not even be aware of a simple option provided by the income already being generated by your business. It’s actually very simple too! Your business has the opportunity to receive a lump sum payment in exchange for a share of future sales based.
If acquiring capital for your business or idea seems like an impossible task, do not fear, we are here to help. If your business is currently seeking capital or you have any questions about the above mentioned methods, feel free to email us your questions or tweet @TrueMerchant!
