The global economic outlook has had a major impact on most countries across the world. As most global companies look to offload their expenses, the craze for starting a business has also gone up significantly. Most of these ventures are small or medium ventures with limited capital inputs.
It is therefore optimally important for these brand new entrepreneurs to have a crystal clear idea on how to raise new venture capital. Starting with zero funds is in itself a big challenge. It’s not simply, you say ‘start,’ and the business starts chugging like a well-oiled machine.
Venture Capital|Detailed Research
Entrepreneurs have to do a comprehensive market research in order to fully understand the funding options, the current market scenario in that particular field, identify the customer base and also the major competitors before starting.
An important site while starting a new business would be the website of the Small Business Administration (SBA). This can guide you with the elementary information on what facts and resources you need to get your venture started. It also gives information on the desired criteria in order to raise capital effectively.
Venture Capital|Online Drawback
A little bit of offline research can also be done from various other sources like books, television shows and even from other successful entrepreneurs. Since experienced entrepreneurs have been through this process, they would be the ideal people to give you any kind of inherent information. He or she can also prove to be a helpful aide terms of building a chain of contacts suitable for the venture.
Venture Capital|Sources of Capital
The sources of capital are not limited to any particular number today. There can be multiple means of obtaining the amount that you need to start your business.
The first and foremost is – equity financing. The lending organizations offer entrepreneurs loans at a particular rate and provide you with the option of paying back the amount you owe, at any time throughout the fixed duration of time for which you have borrowed the money. That way the entrepreneur can focus on ways to improve his business, increasing the profit, rather than always having the tension of payments in their mind.
Secondly, money could be secured from venture capitalists and angel investors as well. In these cases, investors invest in your company, expecting to receive higher returns for their investments. This is done in terms of acquisition, IPO or buying shares to sell them in future, usually at a profit.
Thirdly, using your own personal financial resources to get money can be another option. There are various sources available like personal checking, savings account, credit cards as well as retirement accounts.
You can also avail money with the help of secured or unsecured loans.
With so many options available it’s easier and trendier to become your own boss than work for someone else. As the outlook changes, this trend is expected to flourish even further. It’s time to take the plunge and bring forth the true boss inside you.
This post is written by Lauren Devaney. Her recent contributions on development and management of business finance has proven to be very helpful. She has been working with the team at www.paydayloansuk.org.uk to provide instant cash loans for all your short term funding needs.