Option 1: The Family Loan
Nobody wants to borrow money from a friend or family, but in some cases it can be the most valuable thing they’ll ever do for you, and they can benefit greatly too in the long term.
Option 2: Crowd-Sourcing
Sometimes it simply isn’t possible to get an investment from a traditional method. Prior to the internet, this could have been problematic, but today’s online world has allowed for a new option.
Crowd-sourcing has risen up as a viable method for both generating funds into a start-up, and also sharing profits in return for expertise. It’s been called the most democratic of financing options for a reason.
The internet, and its legions of users, can be hugely beneficial to a start-up, but the entrepreneur must keep it relevant.
Option 3: The Business Angel
Dragon’s Den has given widespread publicity to the investment angel process, albeit if the stylised television version isn?t exactly the way most work.
Angels come in all shapes and sizes and can provide not only capital but also, and often more valuably, expertise to make an idea shine.
Option 4: The Bank
The traditional method of speaking to the bank manager is becoming ever less likely in these days of austerity and non-lending, but success stories are still possible, with many entrepreneurs still maintaining the old way is the best way.
Option 5: Self Financing
Of course, giving away any percentage in an entrepreneur?s company is a hard thing to do, particularly when they will work so hard to achieve success, only to later give a portion away in dividends.
Many entrepreneurs manage to finance their endeavours themselves, with either savings, re-mortgaging or profits from other businesses they may have.
The key is cash flow, not so much to push the company forward as most of this can be done by the efforts of the individual, but to feed and house the entrepreneur and their family. As long as this is covered the real entrepreneur can act.
Some suggest re-mortgage your family home, I simply didn’t see the need to do this and for any entrepreneur thinking of doing this I advise them to take counsel on their business plan, find a mentor that will tell them straight on the risks and potential of their business, keep your day job in the early months, or work self-employed to finance your family. Don’t sell your heart and soul to investors.