Finding funding is the main issue for most new businesses. You have the ideas, the location, and maybe the product already, but you still need some cash to get things rolling. Paul Saunders, co-founder of James River Capital says there are seven ways you can attract funding to your new business.
- Personal savings
This is also called bootstrapping because it means you are using your own money. This can help you get other investors as it shows you are willing to use your own money.
- Crowdfunding campaigns
Thanks to the Internet you can put the word out and let the world contribute to your idea. Market your idea and let the world get in on the action.
- Business loans
These are loans that come from government programs like the Small Business Administration. These loans could be a little more expensive but you can get the loan faster and are more likely to be approved. A line of credit is another option, where you borrow money as you need it, as opposed to a lump sum at the beginning. Loans from banks fall under this category.
- Local loans
These are funds from local sources such as a business development center. The local chamber of commerce can help, and they are usually happy to have another business in town.
- Angel investors
Angel investors are people who make loans to invest in businesses. There are some places online to find angel investors, and some communities have groups of them.
- Venture capitalists
Venture capitalists are similar to angel investors, but they seek more profit. They are looking for a fast return, that is substantial, to their investment.
- Trading equity or services for capital
Another option is to exchange stock in your company for money. You may also trade services this way too.
Saunders founded James River Capital in 1995 after purchasing a department from KP Futures and making it into a new business. Saunders’s career has been spent finding ways to finance various businesses.