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How do you get cash?

    • 64 posts
    September 9, 2012 11:29 AM EDT

    There is a way that I like to call putting the cart before the horse.  Instead of getting financing and then getting customers - get the customers first.  Then, you can etiher get them to prepay or use their job orders or invoices to get the financing needed - asset based financing.

    There are micro credit loans that can provide up to $35,000 for startups and $50,000 for established businesses - more than you can probably get from crowdfunding.

    Or, work a regular job full time and your business part time until your business takes off.

    ---
    Business Money Today
    Small Business Loans & Start Up Loans

    • 2 posts
    September 6, 2012 4:29 AM EDT

    A colleague of mine compiled a list of ways entrepreneurs/startup founders can get funding for their business without having to sell equity. His list is below, but I'd love to know if anyone knows of other methods. Or, have you had any success with the methods he mentioned? (sorry about the strange formatting, I copied and pasted his list)

     

    Crowdfunding

     

    Kickstarter, Indiegogo and others have demonstrated that an idea from the right entrepreneur can earn millions in crowdfunded capital.

     

    PROS

     

    • Tools like Kickstarter and Indiegogo make it ridiculously easy for anyone to collect capital on an idea alone.
    • When an idea goes viral or gets big media attention an entrepreneur can earn millions.

     

    CONS

     

    • Non-equity-based crowdfunding won’t work for you unless you have a tangible, semi-mass-producible product to offer.
    • Online donors are savvy and typically won’t fund ideas that aren’t well thought out or from established names in the startup community.
    • Crowdfunding creates additional work. Having a marketing plan and the people to execute is essential for success.

     

    GET STARTED

     

    • Researching successfully funded projects can help entrepreneurs structure page layout and acquire the right mix of creative assets. Planning the crowdfunding page marketing strategy will maximize odds of success.

     

    Cash Prizes for Small Businesses

     

    Entry into contests may seem like a long shot, but voting and nomination models help small businesses take matters into their own hands. Contests like the SMB Challenge promise to give $50,000 to winners for entering.

     

    PROS

     

    • Small business contests are easy and often free to enter.
    • Entrepreneurs are not restricted in how they use contest winnings.

     

    CONS

     

    • In many cases final winners are chosen by a public vote. This also means that, like crowdfunding, business owners must set time aside time to promote their company page and earn votes.

     

    GET STARTED

     

    • Entrepreneur forums and gathering places may help locate new contests. Creating a list of contests and template entry language may help entrepreneurs manage the process.

     

    Government Grants

     

    The United States gives out millions in grants each year to new companies. Criteria for eligibility varies based on the details of the grant, and while the concept is old the money continues to flow.

     

    PROS

     

    • Government grants are small businesses friendly. Doing a quick search can uncover opportunities that fit a variety of industries.
    • Small business grants can be large, creating a major windfall for cash-strapped founders.

     

    CONS

     

    • Winning a grant means having the right people with the right credentials and often endorsement from a major research institution.
    • With narrow industry focus (typically STEM industries), hypercompetitive environments and long lead times government grants may be out of reach for many entrepreneurs.

     

    GET STARTED

     

     

    Goals and Savings

     

    While it may seem like an obvious way to fund a business, earning and saving money has never been easier.

     

    PROS

     

    • Free tools like Mint.com allow entrepreneurs to get a complete picture of their own net worth and set comprehensive savings goals with time periods attached.
    • Companies like Airbnb and Buzzcar are helping entrepreneurs fund their dreams with sustainable, recurring revenue streams.

     

    CONS

     

    • Saving money takes time. Without aggressive supplemental income entrepreneurs may have to wait a year or more to fund their dream idea.

     

    GET STARTED

     

    • Entrepreneurs should create a plan to save enough funds to get the business off the ground and set a realistic monthly savings goal. Tracking the goal religiously and staying on target will ensure success.

     

    Friends and Family

     

    An entrepreneur’s friends and family can be an accessible, easy to manage form of early stage capital.

     

    PROS

     

    • Friends and family are more likely to come with few strings attached, allowing entrepreneurs to run the business without interfering in day-to-day operations.
    • Accessing cash from friends and family can be one of the fastest forms of funding.

     

    CONS

     

    • Asking friends and family for financial help comes with a host of psychological pitfalls and may change relationships for the worse.
    • While it is tempting to take the money and get back to business, entrepreneurs should take care to be as transparent as possible, communicating early and often with investors.

     

    GET STARTED

     

    • Start an email list or private Facebook group for transparent and continuous communication with friends and family investors. Entrepreneurs must let them inside the company without adding workload to their already busy schedules.
    Originally posted on lonelybrand