HOW TO FUNDING FOR START-UP

A good business plan is not enough because if we don’t have guaranteed capital, no matter how good the idea is, our business will be “dead” right from the start. So, how to raise enough business capital for your project, let’s refer to some ways here:

1. Use your own capital
In many cases, using your own money instead of borrowing or calling for investments is a good development because you won’t have to worry about monthly debt bills or arising loans. You can invest in your business by using savings accounts, for personal consumption, or as a mortgage to get the necessary financing.

2. Call for investment from family and friends
Surrounding relationships such as relatives and friends can also be potential investors for your startup project. This is the main source of capital to create motivation at the beginning. However, the closer the relationships are, the more “touching” money issues, if you are not careful, you may encounter awkward situations in the future.

3. Fund from co-founders
Finding a like-minded person to contribute capital and collaborate is also a good choice. It is not complicated in terms of procedures and can easily find collaborators if the idea is good. However, there is one caveat when choosing your partner: Don’t just care about how much capital they put in, but pay more attention to the suitability such as personality, circumstances, views, and business ambitions… It’s best to make capital contribution clear. In order to be transparent about the rights and obligations of cooperation, you need to discuss carefully and legalize all paperwork to avoid problems later.

4. Calling Angel Investors or Venture Capital Funds
Angel investors are individuals with idle capital who want to fund a startup. In return, they will take ownership of a part of the company or seek a return on investment. These investors often use their own money, and they tend to invest in small and medium-sized businesses.
In contrast to angel investors, venture capital funds come from raising money from others to establish a larger investment fund and operate professionally. Cash flow never seems to be lacking, but it’s important how the business performs in projects.
Before applying for financial support from investors, entrepreneurs need to have extensive knowledge of the investment process to decide on the most potential investors and then come to negotiations.

5. Bank loan
Banks can provide financial support to start a business in the form of loans. If you want to convince them to lend, you need to research and make a detailed business plan, which should focus on a financial plan with transparent information about cash flow, capital sources, and the roadmap to recover and regenerate capital flows. When choosing the method of mobilizing capital from a bank, the interest rate is also a thing that you need to pay attention to.

These are some important notes to raise capital for those who want to ensure a financial source, then you can start a successful business. Please prepare carefully to be able to mobilize effective capital from many sides.