From using a crowdfunding platform like Kickstarter to making sure your plans are solid, here are nine answers to the question, “What strategies did you use to get funding for your startup?”
- Use a Kickstarter Platform
- Take Advantage of Bank Overdraft
- Bootstrap Your Business to Save Money
- Use a Self-Financing Strategy
- Look For Multiple Funding Sources
- Build and Use Your Personal Savings
- Take Part in a Business Incubator
- Apply for a Small Business Loan
- Plan Thoroughly Before Pitching to Investors
Use a Kickstarter Platform
I funded my startup by raising funds through the Kickstarter platform. I enlisted the help of over 1,000 backers, using their feedback and expertise, to design the perfect prototype of my first product.
With their help, I crushed my original fundraising goal of $15K by raising over $180K in some months to launch my business concept. I still focus on creating new products or making internal improvements to the business by leveraging customer feedback, so that aspect was crucial, especially during our initial launch.
Keep your backers involved and looped in during the development process to really give your first customers ownership over their influence on your product. If you can keep your word and get people excited about something new that they crave, you can do exactly what I did.
Zach Goldstein, CEO and Founder, Public Rec
Take Advantage of Bank Overdraft
When I started my exotic flower business, I knew that finding the funding to make it successful would be key. Bank loans seemed out of reach at first, but thankfully, I could take advantage of my bank’s overdraft facility.
After taking out a large enough overdraft to cover the startup costs, I set about getting the business off the ground. Since then, I’ve been able to scale up with additional investment from private-equity firms and venture capitalists, but none of that would have been possible without my trusty bank overdraft!
Lorien Strydom, Executive Country Manager, Financer
Bootstrap Your Business to Save Money
When we started our business, we resorted to bootstrapping because of a lack of venture-backed capital to compete in the FinTech market.
For instance, our team needed to address basic legal needs in the initial stage of company formation. Hiring a private lawyer was expensive and financially exhausting.
As an alternative, we consulted some friends practicing law and educated ourselves using free resources on the internet. This strategy pushed us to be resourceful by utilizing our personal savings and looking for inexpensive and practical means to run the business.
Allan Stolc, Founder, Bankly
Use a Self-Financing Strategy
Each of us has mature companies in the tech industry that are generating healthy profits. Therefore, rather than seeking external investment, we have leveraged these profits to fund our new venture.
Our strategy has been to keep our operations lean and efficient and to prioritize long-term sustainability over short-term gains. By doing so, we have been able to build a solid foundation for our startup and focus on developing services that will drive future growth.
I am committed to this approach and plan to continue using it until our startup is self-sufficient and generating positive cash flow. By doing so, we maintain complete control over the direction and future of our company and can make decisions that align with our values and vision for the future.
Luciano Colos, Founder and CEO, PitchGrade
Look For Multiple Funding Sources
We could secure funding for our moving startup through a combination of bootstrapping, angel investors, and venture capital firms.
To begin, we started by bootstrapping our startup. This involved us using our own funds to get the business up and running, as well as leveraging our own networks and contacts to move forward.
We then reached out to angel investors who will invest in our business, offering them equity for their initial capital.
Finally, we engaged with venture capital firms, who provided us with a more substantial capital injection, allowing us to expand our operations.
These three sources of funding allowed us to get our business off the ground and to expand, allowing us to offer more services and gain more customers. We are grateful for the support of these investors and the trust they put in us to create a successful business.
Shannon Steinberg, SEO Manager, Allied Van Lines
Build and Use Your Personal Savings
Most of my capital came from the personal savings I accumulated from previous employment. It took a lot of perseverance and discipline to save up the money for my company’s startup and not spend it unnecessarily on superficial desires.
One thing I learned from starting your own company is that you have to accept the fact that you will experience delayed gratification. If your goal is to start your enterprise without using a business loan, you must start preparing financially now, not later.
You also have to know that growth might not come as quickly as you would expect, given the limitations you have for finances.
Preston Powell, CEO, Webserv
Take Part in a Business Incubator
I was fortunate to be part of a business incubator where I received mentorship on how to start a digital business. This four-month program aligned with my goal of starting an online business that explored my skills in marketing and SEO.
My business was among the top five at the end of that accelerator program, and I received funding of $45,000 to start my business, which I invested in developing our app, hiring staff, and marketing.
Alvin Wei, Co-Founder and CMO, SEOAnt
Apply for a Small Business Loan
I quit my job when I was just about to start my business, which meant that I needed to secure another source of funding other than my savings.
To do so, I approached Lloyd Bank, a well-known bank here in the UK, and applied for a business loan. Fortunately, the bank approved me for a small business loan amounting to a little over £10,000. The loan that I got was a traditional term loan with 6 years at 3.9% per annum.
I used the money to hire a few people and start working on my first affiliate comparison site. As the business started growing its cash flow, I increased my monthly payments and sometimes I even made advanced payments.
Thus, I fully repaid my loan over three years before the term. Small business loans, I would say, are a very convenient way of securing funding for your startup. If you get approved, you’ll immediately have access to a lump sum of cash that you can use to jumpstart your business without sharing a part of it with someone.
Jonathan Merry, Founder, Moneyzine
Plan Thoroughly Before Pitching to Investors
I take great pride in the achievement of raising a seed investment round valued at $6M. The process was a long and arduous one that required us to prepare our business thoroughly.
We had to make sure we understood our target market, developed our business with optimal features and scalability, crafted an effective go-to-market strategy, established partnerships with key players in the industry, optimized our pricing structure, and created an insightful financial model.
Once we had all the above elements well thought out, we started presenting our company to investors. We began by participating in multiple pitching competitions where venture capitalists could get a full understanding of our startup’s potential. After a few months of pitching, networking, and negotiating, we could close our seed round with an investment.
Ahmet Durmusoglu, Co-Founder, ContentGo