7 Definite Ways to Raise Capital for Your Business

Whether your business needs funding or not, knowing how to raise capital is a smart choice to lock in long-term stability and success.

A business can aim to scale up, invest in talent acquisition and use the financial gains to execute more development and growth strategies.

7 Definite Ways to Raise Capital for Your Business

Organizations needing to be financed can either use equity financing, which involves company stocks in exchange for payment or choose debt financing, i.e., borrowing funds and agreeing to pay it back later with interest.

Here are some of the best options that are available to businesses to procure definite funding:

1. Bootstrapping

Bootstrapping is using your money to run your business. It may not be an ideal method, but it is the easiest way to raise funds. You are more in control of your finances and are not answerable to outside investors.

Moreover, funding your own business displays credibility that influences other potential lenders to invest in your business.

2. Angel Investment

Wealthy individuals investing in businesses alone are called angel investors. These investors are known to invest frequently in a business as a group.

All you need to do to get them on board is have your business plan and pitch tailored to their needs while having all your key financial information readily available.

3. Venture Capitalist

These investors belong to venture capital firms and mostly invest a large sum in more mature companies. They tend to be extremely selective and invest in businesses that show promise to return the most profit on their investment. You can set up a meeting using personal connections and networking.

4. Crowdfunding

Crowdfunding entails collecting small amounts of capital from many people, which helps fund a new business venture. Websites such as Kickstarter, GoFundMe, and Indiegogo are the best-known crowdfunding sites.

This allows you to reach out to like-minded people who may develop an interest in your business product and invest. Raising capital through crowdfunding also gets you valuable consumer feedback on your product, which is helpful in making your next business decision.

Raise Capital for Business

5. Networking

If you can handle merging your personal connections with business, raising capital can be rewarding for you. Ask and try to persuade your friends or family to invest in your business.

Network among entrepreneurs, reach out to real estate investing clubs or a group of accredited individuals you can think of that may fund you. Money talks may be uncomfortable, but families tend to invest the most.

6. Peer-to-Peer Lending

Peer-to-peer (P2P) lending can occur on online platforms such as LendingFront, which helps borrowers find lenders that match their needs. This eliminates the traditional ways of working with a bank. After the completion of a simple application process, businesses can connect with the right lenders.

This form of lending is also known as embedded lending. LendingFront’s technology makes extending capital to business owners more convenient and efficient, providing you with a customer portal that manages all your business and transactional details.

7. Grants from the Government

Applying for government grants is another option to raise capital. These grants are available at federal, state, and local levels. Special grants are available for female entrepreneurs and businesses owned by ethnically diverse individuals.

It’s Time to Secure Some Funds

With all the above methods, raising capital for your business now seems attainable. You can get started on securing some funds right away. Working towards building a funded business combined with a good chance of extra funding is always a smart choice for future business enhancements.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan