Boom – you’re suddenly sitting bolt upright in the bed. Nope, there isn’t a burglar downstairs, or at least you don’t think there is. You’ve just had the idea of the century and can’t wait to put it into action. Billionaire boys’ club here I come. It’s a winner, a no-brainer, a sure thing and you’re the one who is going to make it happen. There’s only one pitfall, though, and that’s funding.
The groans of displeasure from the entrepreneurs are unmistakable. Yep, that’s the sound of people who have filled out and filed thousands of forms in the past. “Please don’t make me do it again,” you say while begging on your knees. “I’ll do anything!” For the uninitiated, this is how boring it is to apply for a loan and obtain funding. Think watching paint dry while simultaneously turning your gaze to a kettle that won’t seem to boil.
Some people say there’s no need for excitement. The only goal is to secure the money and kick-start with the business idea. There is no doubting this is true, but it’s better to have fun and love what you do rather than wishing it was over. A passion is all-encompassing; it’s not just here and there. Below are seven options to try if you want to put the “fun” back into funding.
For the businessmen and women who have been living under a rock, let’s take a look at the concept. With crowdfunding sites, the sole aim is to pique interest in the idea. By doing this, you encourage participants, regular Joes on the street, to part with their hard-earned cash. Impossible as it sounds, this option has been behind a handful of success stories in recent years for many reasons. To begin with, people aren’t as dead inside as society might suggest. Secondly, they only have to give one or two bucks, which helps with the first point.
Companies that have taken hold of the market are the ones that add novelty. Kickstarter is probably the most well-known crowdfunding site and it has some cool features. For example, their terms and conditions don’t repay the cash. Because it isn’t an investment, this encourages entrepreneurs to find new ways to add value. One of our faves is naming a product or service after a donor. How sweet!
Of course, you can keep it basic and offer subscribers a freebie to keep them interested. Either way, it’s more exciting than sitting in a stuffy office dealing with bankers.
Crowdfunding and peer-to-peer lending have lots of similarities. For example, you can do it online at the click of a button. And, there is no need to meet the person beforehand. All you have to do is reach out to a stranger and ask them for a loan and convince them you are good for the cash. How hard can it be, right?
P2P loans are incredibly difficult to obtain, which is well worth remembering. Fellow entrepreneurs aren’t like banks where they will hand out funding hand over fist. The system isn’t gamed in their favor, so they take plenty of precautions. Checking a company’s credit rating is fair game, but these lenders may pull out because of changes in the economy. And, it may not be anything huge, anything that would scare a traditional lender. However, they gladly take a risk when money is involved. So, your job is to show them that they can turn a profit by sanctioning the loan.
The unpredictability and the thrill of going where no entrepreneur has gone before are intoxicating. Sure, there may be lots of stress and head banging but they are part of the fun too.
Before you apply, it’s essential that you do your background research first. Without knowing how these people operate, and what to expect, there’s the potential for failure. Anyone who has researched the financial sector in the past will recognize that it isn’t pretty. Numbers don’t make for engaging reading when there are thousands to consume. It’s like being back in math class with Mrs. Smith. So, how on earth is this enjoyable?
The answer is two-fold. The first thing to note about this method is that you aren’t alone. Blogs and individuals online are on the same page and want to help you beat the system. Something is rewarding and gratifying about sticking it to the man while taking their money. The second thing is human nature. Upgraded Points has received many business cards and it has lots of info to offer. Because men and women can’t let anything go, at least for the most part, it’s almost as if you’re compelled to be thorough. As soon as you spot something that piques your interest, you’ll spend hours trying to get to grips with the data.
Plus, blogs and websites have character and personality so reading and listening to their advice is funny.
Or should that be grants? Logic dictates that the people in power don’t like to give anything away for free. Healthcare costs a fortune in this country for God’s sake while the Brits and Canadians get it for free. If ever there was an example that proves the point, it’s this one. Don’t underestimate the political parties. When they need to be, they can seem flexible and philanthropic. When does this happen? It happens when they can make money from the transaction.
Grants are available to SMEs because the government has to stabilize the economy. Big corporations such as Apple and Microsoft are the jewels in the crown, yet they aren’t the lifeblood. That tag falls to companies such as yours. Therefore, there are grants on the table that will help get the firm off of the ground. Full disclosure: applying for one is as boring as filling out a bank loan form. There’s a lot of T’s to be cross and I’s to dot.
Still, knowing that you can expand your business for free is exhilarating. And, the fact that the powers that be have helped is quite emotional. Okay, it doesn’t last for long, but it makes you wonder if they are all narcissistic egotists.
Think of this as selling debts in exchange for money up front. The way factoring works is that you swap your receivable accounts, i.e., money owed to the firm, for a cash sum. Businesses that are shrinking or losing money are not tailor-made for this funding method. However, growing businesses (that’s you!) are perfect because they can use their assets to stay liquid. As the firm expands, it should have an ideal balance between receivables and cash flow.
Negotiating a deal is always exciting because you want to be the party that wins. Factoring involves constant bartering to ensure your business is in the best position. Remember that it isn’t like most negotiations because you’re giving away potential. Account receivables may have a certain value now, yet it can skyrocket in a matter of days.
To limit any future damage, try and agree to a deal that offers a percentage of an asset. It may have to be a significant sum, 10%-15% say, but it keeps you in the game. There is nothing as fun as watching a receivable you owned transform into a cash cow.
Regular watchers of “Silicon Valley” know how incubators work. Don’t worry though because Erlich Bachman isn’t the industry standard. The way it works is simple: an investor offers money in exchange for shares in the company. Picture “Shark Tank” but without the cameras and esteemed entrepreneurs ripping your plan to shreds. So, to get a piece of the action, you have to show why the brand is a good investment.
It might be the idea, it might be that there is a gap in the market, or the investor might see something you don’t. Whatever the reason, it’s vital that the firm stands out from the crowd. Practice the pitch beforehand so that everything goes smoothly. The same logic applies to the PowerPoint presentation if there is one.
Please don’t overextend to secure funding. Incubators often try to get the best deal possible for their money, which is easy to understand. On the flip side, you don’t want someone with too much control, especially if they don’t share your views. Set a percentage and an amount and get as close to it as possible.
If in doubt, you can find an investment and take a punt. Okay, that isn’t the best term to use because gambling should never be on the cards. A solid project is one that has plenty of positives and very few negatives. Of course, you can go down the Bitcoin route if you want, but there is no telling where it will spit you out.
Investments fluctuate from one day to the next, which is why they are exciting. One moment you’re down and the next you’re on top of the world. There isn’t a feeling like it in the world.
How do you feel about finding funding now? As if it’s possible to have a good time?
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