Do you need money to fund the growth of your startup, but the bank won’t give you any? Don’t panic! There are other ways of financing your startup.
It’s hard to get money from financial institutions these days, especially if you don’t have a big track record as an entrepreneur. Don’t have savings or family members and/or friends that are willing to help you out? Maybe you need to look for seed funding in other places. You can search for an informal investor, but you can also try one of these alternative ways to keep your startup moving forward financially:
There are many startup/entrepreneur/business plan contests where you can win money, sometimes even big amounts. Some startups manage to win several contests a year, so they get up to 100,000 euros to spend on their business. Often, these contests also cause publicity for your startup as well as some good advice from an experienced jury.
You can go for a strategic partnership with another company and share benefits. For example, there’s a startup selling crocheted ties. The entrepreneurs did not have enough money to pay for a stand on the big fashion fairs. So they searched for a partner, and found a big company selling suits worldwide, that offered to showcase the ties in their stand. They shared profits.
If you are in a network of startups, ask around for help if you need anything you can’t find or can’t afford. There might just be someone with some empty office space or who can make a website for little money for example. You can help them in return with something you’re good at or something you have to offer.
Do you need to pay suppliers before you receive money from your customers? Ask them if they are willing to wait a bit longer for you to pay the bill, say 90 days instead of 30/60 days. Or send you the bill later, for example after three months. Offer them discount in return, and you’ll see that many suppliers are willing to do this. Make them aware of your cashflow instead of irritating them by not paying the bill on time.
This might seem a bit strange, but you can ask strangers to help you out. I’ve seen a startup that got in financial trouble because of some strategic changes in the company. The founder asked his Twitter followers to help out. They did, so the company was able to move on. Do you have a lot of followers on your social networks? Try to locate your fans. Who has supported you from the very beginning? Your professor from university, an experienced entrepreneur that gave you some advice? Don’t be shy to ask, you’ll be surprised how many people like to give money to an engaging startup.
posted by Karin Husslage