Nowadays having a great tech business idea is not enough, you need funds and it’s not easy to get them. Find out how to get funding to start your tech business.
If you are launching a tech business you will probably need a website, a tech team, office space, and surely, at least enough cash coming in each month to cover your usual expenses. That funding will be useful to properly launch your company while having a decent way of life.
1. Self-Financing / Bootstrapping
Self Financing is an option that you can consider and can be very easy and practical BUT you need to have a lot of money in reserve and unfortunately, this is not the case for most entrepreneurs.
Bootstrapping refers to the fact of managing with your resources and the capital flows generated by the business to finance its launch and/or development. By bootstrapping, you put yourself in an economic logic where your guideline is to do the maximum with the minimum.
While self-financing your startup can be relatively easy, it comes with a big downside: you are in a really bad situation if the company does not succeed, all your savings will go to waste. That’s why before you finance your business yourself, you need to be sure of the strategy for your business plan.
But in any case, you have to make sure that your business plan is solid if you want to convince investors.
2. Friends and Family
Friend and family might seem a bad idea because you are afraid of their reaction and you don’t want to put them in a difficult situation. Don’t worry you are not going to lose your friends if you ask for help and at least they will be aware of your hard work and your ambition.
Even if they are your relatives don’t forget to show them a strong business plan, this one will probably help them realise the potential of helping your tech company. Moreover, this business plan needs to be understandable by everyone and they should be able to find all the information about the what you are selling, what you plan to charge, how you will earn money and whether you are asking for a loan, investment or donation (in the case they are investing or loan you have to explain when they will touch money and how much).
A very positive point of this solution is that having your friends and family helping you launching your company can be also motivating for you.
3. The traditional way
Nowadays get bank credit is a real obstacle course. In fact, bankers have become much more cautious so your business plan must be really solid. Moreover, you must be patient to get an answer to your request, but if this is accepted at least you will have the required finances to start your business properly and stress-free.
4. Search for angel
Another good way to get funds is searching for angel investors, usually established business professionals with high net worths who are looking to invest in promising tech companies. Typically, if your business plan please an angel investor this one can give you a lot of funds to grow your business and also help you with the development thanks to his network.
A participative tool in full development crowdfunding can be the perfect way for you to raise funds if you think your idea can please internet users.
Many crowdfunding platforms exist, you need to do a few research before putting your idea on one of them to find the perfect one for your business.
Then, you will have to decide what you will ask and the different types of financing you will propose: donations (to sell a product or to collect small sums), loans, or even fundraising. Then you have to invest in marketing your fundraising campaign because a successful crowdfunding campaign requires as much effort as convincing a banker. And above all, assess whether your project is “sexy” enough to seduce Internet users.
6. Venture capitalists
A venture capitalist is a person or company that invests in a business venture, providing capital for startup or expansion. Venture capitalists (VCs) are more likely to require a very strong business plan that includes every possibility, but they can also give you larger amounts of money.
This option needs to consider if you think that crowdfunding, Bootstrapping and relatives funding are not enough.
It’s very difficult to convince Venture capitalists because they receive a lot of propositions and since they are putting a lot of money in your business they need to make sure that this one is going to pay off a lot.
We hope that this article will help you find the best solution for your tech business launching. And as we like to say at 3 Colours Rule you must believe in your idea if you want to convince anyone, so stay motivated and pursue your goals!
This article was written by Ambre Kerleau
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