Ways to fund your startup

Looking for creative ways to fund your startup business? Who can forget the bikini car wash put on by an odd bunch of misfits in the movie Dodgeball, where Justin was paid by an over-zelous customer to wash his truck again and again? Of course you needed reminding of that awkward scene. You’re welcome.

Advertisement
There are better ways to fund your startup

Raising funds for your startup can be almost as awkward… although I hope not quite. I feel if you’re raising funds by wearing a pair of budgee smugglers or a mankini, perhaps you’ve taken a wrong turn somewhere. Unless of course your startup makes makinis.

Anyway… below are 7 options to fund your startup.

How to Fund Your Startup

Angel Investors

Angel investors provide unsecured loans for businesses they see potential in. Lack of loan security can sometimes cause tension because the investor is likely to seek some ownership or control to minimise their risk. Check out Capital Angels or Melbourne Angels.

Grants and Incentive Funding

Grants and funding are often available from state or federal government initiatives. You need to be cautious about a few things. Firstly, you need to check you meet the funding requirements, which are often very specific to an industry or certain benchmarking figures. Not every business can get a grant.

Family and Friends

Family and friends are usually the obvious place to start seeking funds but be careful to discuss a lender’s expectations. Is it a loan, which they expect to be paid back or is it an investment, along with the risk and reward that comes with it. I’ve worked with clients who borrowed money from family members, who expected both ownership equity and a fully repaid loan.

Non-Equity Crowdfunding

Airbnb Founders ran a crowdfunding campaign where they sold boxes of cereal during the Obama vs McCain elections in the US. You can run a campaign on Kickstarter or a similar platform, where people can donate in return for rewards, but not any shares or ownership of the business. Consider rewards like merchandise, discounts, memberships or a backstage pass of sorts.

Launch and Re-launch Events

When done right, events can be a helpful method of quickly raising funds, while drawing attention to a new service or initiative. Engage a keynote speaker, put on a show or just sell tickets to a dinner. You can list events and sell tickets on a site like Eventbrite or Event Bookings.

Pre-sales Packages and Offers

You can pre-sell a book that’s not published, so why not anything else? Or before you write the book, you can sell access to the blog post. Sell tickets to an event before you have all of the detail or offer discounts or incentives for whatever you’re selling. I know a car detailer who put together 12 month packages to get some money in the door… and they sold fast. Seeling online but not sure how? Start with something like Gumroad to sell digital downloads.

Upsells and Add Ons for Existing Clients

There’s a book that’s a few years old now, called Instant Income. In it, the author talks about upselling or value adding for existing clients. With any luck, they already trust you can deliver on your promises. Plus the sales cycle, and revenue that follows, will be much shorter and sooner.

Fund Your Startup but Be Warned

Above are just a few ideas for how to fund your startup but I feel these ideas should have a warning label attached. Often external funding comes with strings attached. In my own experience, new and inexperienced entrepreneurs think they’ve got to go bigger than Ben Hur with their idea. Sometimes you simply need to get started. Test what works and throw out what doesn’t.

Advertisement

Leave a Reply