You got a sustainability-driven startup business idea to change the world but wondering about the fund to get it going. As always, money seems to be the big challenge but trust me it is not. You have to search for the right sources of fund for your startup business.
Apple, Google, Nike, Microsoft, Alibaba, Amazon, Tesla etc none of these successful businesses had tons of money while they started. So, feel relaxed but do not sit idle. You will have to look for sources of funds for your start-up.
Based on the experience in this field, I would like to highlight 12 sources you should look for:
1. ‘YOU’ be the first source to fund
Your startup business deserves the confidence of the first investor i.e. you. In some south Asian business culture, it is said that if you have a good start of the day, the chances are high for a successful day.
As the founder, you must bring in your investment in real money before looking for the external funding source. Do not bother about the amount to bring in. Aim for a specific amount within a specific time period. Within this time, set some milestones and achieve them.
This will benefit in two ways:
- boost up your confidence in yourself and about your start-up
- create a positive foundation and look for the external source.
Do a side gig, sell your services, save from your day job, spend less in boozing, do trading are some ways you could successfully make yourself as the first reliable source of funds.
2.Try out Crowdfunding – beyond the traditional route of fund sources
Many experts argue that you have to have a sexy idea and you have to be great at social media in order to have successful crowdfunding. Thus they refrain from recommending it. But the fact is crowd crowdfunding is still one of the most effective sources of fund for your start-up and a platform to promote your start-up. The traditional crowdfunding platforms like Indiegogo, Kickstarter, fundedByMe, social fund etc are there and you will have to follow the success recipe of the successful crowdfunded campaigns.
But you should prioritize crowdfund your project from the people you know in your life so far.
According to funders & founders we interact about 80,000 people in a lifetime. Even if you consider 1% of it as the people you know and they also know you and if you raise $100 from each, you will have $80 K to start with. So do targeted crowdfunding from the people you know instead of jumping for traditional crowdfunding.
3.Consider Partner as Key Fund Sources
Working with own startup business is fun yet a stressful journey. The journey becomes full of fun if you have a good companion as your partner.
So essentially, even if it is your original idea of the startup business, still I believe you should have a partner(s) with right win-win conditions. This gives strength to the team and helps to sustain the journey.
While you are to recruit partners, you should also keep in mind about fund contribution to the start-up. This ensures accountability and dedication to the business when filling up the bucket with some more funds.
I have written 2 articles about finding the right partner for our business. Have a look below:
4.Explore SME Grants
There are several sources of the fund as grants for a start-up business. Of course, they each have unique requirements to full fill. Still worthwhile to try out. Especially, with collaborations beyond borders will lead you to have a better possibility to get the grants.
One such source is the European Union led fund horizon 2020, Switch Asia etc. It is an exhaustive application procedure, but once you get it, the business will attract external investors at the growth stage.
5.Find Social Funding Sources
The social fund is an institution based funding source which is available for targeted countries, especially in the developing regions in Asia, EU etc.
If your startup business is solving any social challenges related to education, skill development etc this could be one good way to source the fund.
In many cases, it will require the association of the government also. Again, the importance of collaboration is extremely high. Social.fund, the European social funds turn2us.co.uk are few of the examples of such social fund.
6.Try out Challenge Fund Sources
Challenge funds are those which are provided by the institutions to a certain number of business ideas among many. This is more common if your business deals with climate change.
Nordic Climate Facility by Nordic Development Fund, Global Innovation Fund etc are a couple of the renowned challenge funds. They are truly challenging to get but you have to prepare a solid business case with right impact assessment.
7.Apply for Small Business Loan
There exist some organizations who sometimes provide grants to small business led by the people in the minorities, women, physically challenged etc.
It is worth keeping this source as an option if your startup business belongs to any of such categories. Wise to visit your local chamber of commerce to figure if you are able to apply for the grant.
8.Reach out for Innovation Loan
There are commercial as well as state-run banks who have the innovation loan for the innovative startup business. This sort of fund is targeted to promote innovation, drive employment for the youth.
Several of such source of funds are mostly sponsored by the state. Scandinavian countries, the US, EU have particular goodwill for this.
9.Transact Trade Equity or Services
At the inception stage of your startup business, do not look for cash fund. Ask for support from your peers to build the business, for example, creating the social media presence, making an interactive website.
In return, you could promise them in writing to share some equity after some certain stage because of their service.
This might give you the edge to reduce your startup business fund requirement at the beginning.
10.Look for Incubator or Accelerator
Startup incubator or accelerator have spread all across, particularly near the universities or colleges with a strong business program. In the Nordics, they are known as since park.
These spaces are part of communal workspace and mentorship development centres. Early-stage businesses can have a kick start while partnering with the right people.
11.Leverage Social Influencers
This is more relevant to the cause-driven startup business who is primarily driven by sustainable business principles. For example, if you are working to solve any trending social challenge with your solution, reach out to the like-minded social media influencers.
Being like-minded is important because if the target social media influencer does not share the common thought as your startup business does, it will not work out.
But if you find the influencer with the common philosophy it will open up windows of opportunities. They have a lot more right investors as their followers or within the reach of their network.
Besides, I believe, every founder of impact making startup business should aim for becoming a social influencer by thyself and be the voice of the cause let along with the startup.
As a result, finding the sources to fund your startup business does not need to be dependent on others.
12. Take part in contests
It is obvious without having some sort of recognition of your business idea, you and your startup business are unlikely to get notice of the shark tank. That is why it is effective to look for sources of early-stage startup business idea competition and take part in it. It could be in the university or in the locally focused, sometimes arranged by financial institutions and big corporations also.
H&M foundation arranges fashion-related start-up competition in every year. This is indeed good in a way that it pushes you to practice your pitch for the investors. Even if you do not win any money from the competition, it will spread your business, you will get feedback to make your plan more solid and will let you build a network with the right people.
Startup business drives disruptive innovation, makes a bigger positive impact and thus innovative approach is necessary to overcome the challenges to find sources of the fund at the beginning of the startup business.
Share your thoughts and let know which of the sources worked best for you, and which did not. If you want to discuss further and/or need help to figure out the best sources of fund for your startup business, book a free appointment by clicking here. I will be more than happy to assist you.
