Getting money to fund your startup is always a stumbling block when you have a brilliant idea to start a business and no money on the ground.
If you have a tech-related idea, you may have an easier time gaining the attention of venture capitalists or angel investors, but as more companies pursue that angle, finding an investor is more complicated than ever.
So how then do you get your tech-related or non-tech-related business off the ground?
That question is what this article seeks to answer, and it will be done through provision of five realistic ways to fund your startup.
1. Friends and Family
Borrowing money from friends and family is the traditional means of getting money to fund your startup.
Because it may be more difficult to persuade investors or banks of the excellence and viability of your project, your family and friends are likely to trust and believe in your vision and be more willing to contribute to the funding of your company.
However, if you do seek loans from friends and family, make sure that each of you has appropriate legal guidance, especially if the money is taken as a loan.
2. Trade Services or Equity
A business idea will require several skill-sets to pull off, some of which you may not have, nor have the money to pay skilled individuals for their service. You can overcome this challenge by trading equity in your business for the services of the professional. You can make a deal with a neighbor or acquaintance who does some freelance work on the side to exchange services with them, like brand strategy or marketing advice in the future. There are networks of new business entrepreneurs who may want to collaborate or exchange services with you. However, you may not get a yes all the time, as trading services or equity will not give quick cash, and sometimes that’s what people want.
3. Incubator or Accelerator Programs
There are several incubators or accelerator programs in Africa and beyond; these programs train and equip entrepreneurs in environments that serve as communal workstations and mentorship development centers. A notable one in Africa is the Tony Elumelu Entrepreneurship program. Another one is the Y Combinator accelerator program in the United States; if your business idea is excellent and tech-related, you can apply to them. The Y Combinator program helped put one of Nigeria’s fintech companies, Paystack, on the map by providing seed money and mentoring to fund their startup.
Young enterprises can get an excellent start at incubators and accelerators programs by partnering with some incredible people.
4. Small Business Grants
There are several small business grants available to fund your startup. The best part of getting grants is that you don’t pay them back. You can read more about business grants here.
5. Keep Your Day Job
If you currently have a job that covers your bills and allows you to live a somewhat comfortable lifestyle, don’t be in such a rush to resign and pursue your business goals.
Keeping your old job allows you to build your business with fewer compromises and stay true to your ideas without succumbing to financial pressure. You can also gain valuable knowledge from your day job that will assist you in running your firm later on.
