By Kayla Matthews
You have an amazing idea for a new startup. However, there might be a slight problem. You don’t have the funds to get your idea off the ground or the money to do a lot of advertising. Enter fundraising as a good solution to get you where you need to be.
About 28 million small businesses reside in the United States, and about 543,000 new ones start every month, though not all of them survive. The average cost to get a new business going is sometimes daunting. Startup costs vary widely by industry and can run anywhere from $10,000 to $80,000 on average. Here are some easy ways to fundraise for your startup.
1. Enter Competitions
Large corporations sometimes hold competitions to help small business startups. Set up a Google alert to notify you of any “startup competition” or “new business contest” posts. What contests are available varies from month to month and year to year. Seek out competitions that will provide a big chunk of your startup money.
2. Find an Angel
The amount of angel investment is on the rise in recent years, and the tendency is to invest more money into startups rather than constantly adding new companies. If you can find an angel investor, they’re likely to stick with you for the long haul.
3. Sell Stuff
No matter who invests in your startup, they’ll want to know what you’re contributing. If you need only a small amount of seed money, you might even be able to raise it all on your own. First, look around at what you own that you aren’t using or could downsize.
For example, do you really need that car with the $700 per month payment and high insurance rates? Or can you sell it and buy a more modest one, freeing up a few hundred dollars a month? That might not sound like a lot of money, but over the course of six months, it’s a couple thousand dollars extra to put toward your business.
4. Pre-Sale Your Product
If you want to avoid venture capital (VC) funding, because of the restrictions and demands involved, you have to think outside the box. Crowdfunding is one way to achieve this goal and is often done in the form of pre-saling a product to a captive audience. For example, Pebble E-Paper Watch raised over $10 million on Kickstarter in just over a month with the promise of an affordable smartwatch in the future.
5. Talk to Universities
Universities sometimes fund business startups, particularly for former students and the local community. If you have a product that you believe changes the world, reach out to universities in your area to see what grants they offer. For example, Stanford provides funding for non-profit startups that are in some way affiliated with the university.
6. Throw a Party
Do you have a big family or wide network of friends? Throw a business startup party, and ask the guests to pay $100 a head to attend. Of course, you’ll need to invest a bit in a meal, but you can easily feed each person for under $20 and keep the rest for your business. Even better, ask your closest family to pitch in with their favorite dish, and keep the entire $100 for your business fund. You could raise $10,000 with only 100 guests.
7. Rent a Room
Do you and your co-founders have extra rooms in your home, a small guest cottage out back or a mini apartment over the garage? Rent out extra rooms — especially if you live in a city that’s hosting a big event — through sites like Airbnb or VRBO.
If you don’t mind a long-term situation, you might rent out a room to a local college student during the school year and know you’ll have that monthly amount coming in. If every co-founder does the same, you could easily earn $1,000 or more every month toward your startup.
These are just a few ideas for ways to quickly and easily raise money for your new business. Pay attention to how other startups raise money, and watch the online trends. You’ll likely come up with additional fundraising ideas and ways to reach your goals. Together, these tips just may lead you to the biggest success of your life.
About the Author: Kayla Matthews writes about communication and workplace productivity on her blog, Productivity Theory. Her work has also appeared on Talent Culture, MakeUseOf, The Muse and Fast Company.