This is an Influencer Post by Keith Krach, Chairman & CEO at DocuSign.
Startups are gaining greater popularity, and the funding for them often comes from a variety of sources. Typical funding sources include traditional banks, fundraising activities, and investment of personal assets. Although they are not discussed much, there are plenty of lesser-known, unconventional sources of funding.
Startups may opt to go the non-traditional route for a variety of reasons, including ineligibility for traditional funding sources, failure to adequately represent the driving force behind the vision for their startup, and many other factors that may cause entrepreneurs to strike out on their own in search of startup funding. Moreover, it can be daunting to effectively pitch your ideas to an unreceptive audience. Depending on the industry, you may have a hard time breaking through to potential investors.
Look for Free Money
Locating no-strings-attached funds should be your first step in securing startup funding. While it may not provide you all the money you need, if done properly it can significantly affect how much you’ll need to borrow in the future. While grants are typically the kind of free money you will seek out, they are somewhat difficult to obtain. The rules and requirements for grants can be complicated, so it’s wise to consult with someone who is well-versed in grant writing and who has a thorough understanding of the requirements. Strict adherence to the eligibility guidelines will increase your chances of obtaining grant funding.
A good starting point for any aspiring business owner is the U.S. Small Business Administration (SBA), where you can search for grants, read about application requirements and determine if your business qualifies. This is a great resource to find out what you’re up against. The truth of the matter is that most businesses will not qualify for government grants, but if your business happens to be technology-related, it stands a greater chance of obtaining grant funding. Even still, the SBA is a good source of free information for aspiring business owners.
If you’ve spoken to mentors or a small business consultant, you may have heard the term “niche down.” What this means is you need to be highly specific about who your audience or customer is and what you will specifically need to do to serve them. Investors who are in your field or who have a special interest in the population you hope to serve will be better suited to support your venture, and your likelihood of securing startup funding will be much higher. The more detailed you can be in your pitch, the higher your chances are of getting exactly what you need to move forward in your business.
Your idea may not be completely original, but you should be able to articulate what sets you apart from those offering similar products or services. The more specific you are, the better. Anticipate the questions you are likely to be asked and have someone available to critique your presentation.
Crowdfunding has become extremely popular in the last several years, although many people aren’t exactly sure what crowdfunding really means. The standard definition of crowdfunding is “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.” Crowdfunding is a great way to get your business into the spotlight and show potential investors exactly what you plan to do with the funds. If you have a great idea that clearly has the potential to be successful, donors will be more willing to put money behind it.
Rooting for the underdog drives a lot of people to donate to crowdfunding campaigns, and putting your request on the world stage via the Internet can be very lucrative. There are many dedicated crowdfunding sites out there, and new ones seem to crop up all the time. Some of the more widely used sites include Kickstarter and Peerbackers. Most crowdfunding sites function in a similar way. You are able to pitch your idea or product right there on the site and have a direct line of communication with your investors. There are even social media-based crowdfunding apps like Tweetsgiving that help you reach a bigger audience on social media. Depending on the extent of your campaign reach, crowdsourcing can bring in anywhere from several hundred dollars to enough money to fully fund your business plan. Crowdfunding campaigns tend to work best for those with an established business model who may just need some help to gain momentum.
While this is by no means a comprehensive list of non-traditional funding sources, it is a great starting point. The money to fund your startup is out there, it’s just a matter of thinking outside the box and knowing where to look.
Disclaimer: This is an Influencer post. The statements, opinions and data contained in these publications are solely those of the individual authors and contributors and not of iamwire and the editor(s). This article was initially published here.