Getting Startup Businesses Funded

Getting Startup Businesses Funded

Contrary to what most think, business plans are not the finance-generating tools. It’s true, though, that there are a lot of financing options requiring good business plans. However, no investor straightforwardly invests basing on just business plans alone since in actuality, these are only required to communicate ideas and information. More importantly, investors will eye the company itself, its products and its people.

  HA0521 - Bedford staff and M1. A set of images  of HA staff in the Bedford office and new section of M1, north of junction 9. March 2010

But this doesn’t mean you shouldn’t come up with a business plan. Everyone you will be talking to from this point on will expect a good one from you. If you want to be more lucrative with your business venture though, tailor your funding search and approach to reflect the kind of business you will be running and the kind of market opportunities you are going for. Do not waste time trying to win the wrong kinds of financing.

Where You Should Look for Funding

Venture Capital

Venture capital is exclusively for exceptional start-up businesses. It is isn’t an option for any other business that is not projected to have proven management, ideal market opportunity and good product opportunity. If your business is a potential venture capital investment, you most likely already know it.


Private Placements

These are either individuals or small groups of wealthy investors who occasionally meet to welcome proposals. In the world of business start-ups, these group investors are usually called the “doctors and dentists”. So, where can you find them? Other than in the Small Business Development Center (SBDC), you can also inquire from government agencies, other business development centers and business incubators that are tied down to investment communities within your area.

Commercial Lenders

Banks may be the least preferred options by most start-up businesses but they are still a major source of financing for a lot of small businesses. Many small business financing activities are accomplished via bank loans. Should you opt for this, be wary that you may have to set up personal property as collateral.

Other than venture capitalists, private placements and banks, start-up businesses also typically look for funding from friends and family. But if you know no one who’s wealthy enough, then perhaps you can go for the growing trend today – crowdfunding – where you create a profile on a crowdfunding site like Kickstarter, pitch in your business idea, and hope the online community will support it.

Written by Editor

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