When you’re launching your own startup, the question of funding is one you eventually have to answer. In a perfect world, all you’d need is your great idea and you’d be on your way. Unfortunately, the real world’s a bit messier.
See, you know your idea will revolutionize the world, but convincing others to separate from their hard-earned cash isn’t easy. What’s more, they probably want a piece of your business in exchange.
Luckily, there’s a ton of great information out there about startup funding, from whether you should pursue it, to how you should pursue it, to what you need to do after someone actually cuts you a check. Sifting through the garbage to find the gold nuggets, though, presents a challenge. We did that for you, and now present six of the best articles out there about the world of startup funding.
5 Options to Start a Business
This piece by Entrepreneur is for the up-and-coming business owner who maybe doesn’t know exactly what kind of business he wants to start, or who’s in a hurry to get going. Whether you have a great idea, or just the nebulous thought of “I’m tired of working for other people; owning my own businesses feels like the way to go,” this piece by Sujan Patel has a lot of great advice.
Patel walks you through the basic business ideas, from making something to sell online (with a list of the best online marketplaces), to marketing your own services as a freelancer. He then takes you through some ways to fund your initial launch. After all, many people need help getting off the ground, and you can’t start hitting up Angel investors on Day One.
How Funding Works
If you aren’t exactly sure how funding works, this article by Funders and Founders provides a great infographic, and then walks you through each stage in the funding life cycle.
Creator Anna Vital takes you through the process, starting with the idea stage. She does a great job walking you through each phase, and explains what happens when you bring on a co-founder, getting funding through family and friends (so you don’t have to register yet), before finally detailing the process of registering so you can seek Angel investors and then venture capitalists before finally going IPO.
The best part may be how she describes the method for assigning shares of your company. That can be confusing, but she makes it easy to understand. Definitely a good read.
How to Fund a Startup
No list about startup funding advice is complete without an article by Paul Graham. This guy is the startup advice king, and rightly so. This article is from 2005, but is so correct that it’s still referenced by anyone writing about launching a startup.
Like Anna Vital, Graham takes you through the stages, but he adds advice on funding yourself during your launch. Specifically, he advises finding work as a consultant. This works well for Graham’s target audience: tech wizards ready to turn their idea into the next big app.
Now that you have some ideas about launching your own business, and have an understanding about the funding process, it’s time to look into funding sources. MicroVentures helps startups raise money, and it offers a boatload of advice on what it’s looking for in a startup, as well as what investors are seeking.
The Startups page walks you through the entire process, and the FAQ section answers any questions you might have.
Like MicroVentures, Gust helps connect entrepreneurs with capital. Startups and investors alike register on Gust. You can look for either an investor or an investment opportunity by browsing the lists of registered companies by location or industry.
Registering your startup on a site like this puts your company in front of investors actively looking for the next big thing. It’s a passive strategy, but you know the people looking at your profile are directly interested in funding startups, so it’s highly targeted.
Deciding Whether to Crowdfund or Bootstrap
Back at Entrepreneur, we have a look at crowdfunding an idea, which seems to be the marriage of social media and funding.
Just in case you’ve lived in a cave for the past few years, we’ll go ahead and explain crowdfunding. Basically, you put your idea on a site such as Kickstarter or Indiegogo (although there are dozens of sites to consider, so do some research). Then, you share it through online marketing. You probably want a YouTube video, as well as a hefty social media presence to get it in front of as many people as possible.
The idea is to get a lot of small donations, rather than landing one or two large investors. Plenty of people have been highly successful with crowdfunding.
The article also discusses the pros and cons of forgoing outside funding and just bootstrapping your way to success. It comes down to how badly you want total control over your new baby, and whether you have the wherewithal to make it without financial assistance.
So, there you have it, the ins and outs of funding your startup. There’s a lot of information out there, but these six articles go a long way toward explaining the process and helping you decide the right path for you.