Start-ups are a great way to make a lot of money. You work hard for a long period of time, and then you can live the rest of your life comfortably. However, start-ups do take a lot of capital. If you want to start up without any outside investment, you need to be very resourceful. In this article, we will go over seven steps that can help raise money for your company from outside sources if you have no initial funds.
Step One: Create a business plan
A business plan is usually an important first step when it comes to raising capital. Simply put, investors won’t give you their money unless they know what they’re going to get out of it. Make sure to include everything about the industry, the company, what you plan to do with the money, and how you plan to make a profit. This is needed for the negotiation process later. You need to be able to convince the investors why they should invest.
Step Two: Research your options
There are many different types of investors that you can approach. You could look for angels, venture capitalists, or even government grants. Do some research on which investors would be a good fit for your company and then target them specifically in your business plan.
Step Three: Start networking
Networking is key when it comes to raising money. Get out there and meet people who might be able to help your company. Attend industry events, start a blog or even cold call potential investors. The more people you know, the better your chances of someone who’s willing to invest in your company.
Step Four: Go to business plan competitions and pitch your company
Pitching your company at a business plan competition is one of the best ways to raise money. Not only do you get exposure through the competition, but if you win, you’ll also be able to get seed funding for your start-up! You can even use this as leverage when approaching potential investors.
Step Five: Join and go to networking events specifically designed for entrepreneurs and ask them directly for help raising capital
This is a great way of getting in front of people who might be willing to invest in your company. Even though many businessmen aren’t looking for new investments, it’s still worthwhile because they may know someone who is interested. This is where your networking efforts really come into play.
Step Six: Be patient and wait for the right investor to approach you
Even if you’ve followed all of these steps, it doesn’t mean that an investor will automatically come knocking on your door. There are a lot of people out there with money who would love to invest in a successful business, but for one reason or another, they haven’t been approached yet. You need to be patient and keep searching until the right person comes along.
Step Seven: Make sure you have legal documents ready for due diligence on your company
Make sure your company is a properly formed corporation, so any potential investors don’t have problems going through the proper channels to buy stock from you. Have all necessary legal documents ready if an investor is interested so they can do their homework on your company.
There are a lot of different ways to raise money for your company. The best way is to have an investment approach you with the idea, but if that doesn’t work out, there are still many other options available. Using these steps, you can get on track to raising capital and starting your business the right way!