As an entrepreneur in a passionate and ever-evolving tech community, you may have gone through an uphill task of getting your company off the ground.
Tech companies have hardware and software needs, which are quite an expense. Add to it, the high salaries of tech professionals. Most of the times, funding tech startups is a challenge.
Many entrepreneurs like you find it difficult to raise capital for their business. Although challenging, there are a number of ways to get funding for your business.
6 Ways You Can Raise the Money You Need
Funding your own business is probably more sensible than you think. It does carry a risk, but then you know your potential better than anybody else. If you have the determination not to accept failure as an option, and the belief in yourself, you can move mountains.
An advantage of investing your own money in your business is that your confidence shines through. And that makes the investors and lenders believe in you and partner with you.
2.Use a personal loan
Various financial institutions may loan you small amounts of money in the form of a personal loan for a businessman. Some of the advantages of taking a small personal loan for business are:
- You are not bound to the investor interests.
- You can use the borrowed funds for whatever reasons you deem fit.
Many tech entrepreneurs have achieved success through crowdfunding. If you have the right product and pitch it correctly, you can have your own success story.
Other than raising funds for your business, crowdfunding has other benefits too.
- You get the opportunity to interact with like-minded people.
- You get an idea of how people perceive your product.
- Depending on what’s resonating with the people, you can improve your pitch and your product.
4.Apply for a business loan
Technology has made getting finance easier than ever. However, traditional financing products still remain the primary method of raising capital for business. The most common financial products are a business loan, personal loan, credit card, and personal line of credit for business.
To get a business loan approved, there are specific criteria that need to be met. The criteria may differ depending on the lender or financial institution.
If for any reasons, you are unable to get a business loan with a good interest rate, there are other types of funding options available.
5.Ask friends and family
Funding your tech microbusiness through friends and family may not be a preferred option, but it’s definitely a viable one.
Things to consider while raising funds through friends and family
Shortlist the names of friends or family, who:
- have confidence in you,
- understand your plans, and
- are clear of the risks involved.
While you approach them, you need to have a sound business plan, demonstrate passion and due diligence, and have a clear direction to steer your business.
Be realistic about how much money you’ll need. Be clear from the start about the terms of funding. Is it going to be a loan or is it going to be equity in your company?
6.Find an angel investor
Angel investors can be a good source of capital for your business. First, you need to know where to find them. Fortunately, there exists quite a number of angel investor platforms, where you’ll get the opportunity to meet them and pitch your business plan.
Things to consider
- have a solid business plan and a great pitch ready.
- capture their attention with enthusiasm and promising data about your company’s current situation and future potential.
Now that you have understood the ways of funding your tech business, the next best thing to do is use the capital to drive your business forward. Here’s how you can fast-track your path to success.
4 Ways to Keep Your Tech Business on Track
1.Spend your capital wisely
Many tech startups fail because the influx of funds lulls them into having a false sense of security. Start working on your aggressive growth goals. If expansion is on the cards, start working on it optimistically. Invest in talent; hire quality talent over quantity.
2.Protect your intellectual property
Use your money to protect your intellectual property and precious assets. This is important in a tech startup because you are constantly inventing something or other. Hire attorneys and resources to make ironclad contracts with clients.
3.Invest in marketing early
Many business owners consider marketing to be something that can wait until there are more funds to spare. However, even with a small investment, you can market your company effectively.
The power of marketing is tremendous, and the internet has accelerated marketing strategies. Digital marketing is a crucial aspect of a company’s marketing efforts. It gives targeted exposure and drives leads, and it definitely shortens the sales cycle.
4.Understand that overnight success could mean a decade of hard work
Tech companies are hyped to bring overnight success. That’s not true. Just like any other startup, tech startup takes time to succeed. You may face failure at times, but the trick to success is to be patient and resilient.
Shiv Nanda is a financial analyst who currently lives in Bangalore and works with MoneyTap, India's first app-based credit-line. Shiv is a true finance geek, and his friends love that. Whether it is about choosing the right personal loan for businessman, making the best investment choices for working professionals, learning budgeting skills or handling personal financial matters, Shiv is a reliable resource of information. He has made it his life's mission to help and educate people on various financial topics.