Capital for your startup, 5 things to remember to avoid bankruptcy

1.Put yourself to work for your future

There are few things more suspicious than someone attempting to start a business without investing heavily into it themselves. If you aren’t willing to put yourself on the line, then why would anyone else? Don’t be afraid to scrimp and save for your goal. True wealth is grown over a long period of time.

 

2.Leverage your connections

 You will have more luck raising money from friends and family than you would a traditional institution. This can manifest as a lower interest rate as well! The support of those closest to you is valuable just be sure to establish the responsibilities of all involved parties before you sign anything.

 

3.Crowdfund

Crowdfunding allows for products and ideas that never would have gained traction through traditional means to come to fruition.  Be unique and appealing in your campaign. Offer rewards and engage with your community to breed loyalty. 

Waddell, M. (2016). Ready, Set, Crowdfund. Investment Advisor, 36(6), 41-42.

 

4.Location matters

Not all places are created equal when it comes to attracting venture capital. In general, the more metropolitan the area, the better luck you will have in seeking capital. The east and west coasts are good places to be. New York and California both have a high proportion of spent venture capital.

Florida, R., & Mellander, C. (2016). Rise of the Startup City: THE CHANGING GEOGRAPHY OF THE VENTURE CAPITAL FINANCED INNOVATION. California Management Review, 59(1), 14-38. doi:10.1177/0008125616683952

 

5.Let Uncle Sam help out

There are quite a few organizations and programs in the U.S. devoted to helping get small businesses off the ground. The U.S. small business administration website located here is a goldmine for grants and loans. These tools exist for your benefit, use them!

Reynolds, L. (1988). SMALL-BUSINESS GRANTS SPUR INNOVATION. Management Review, 77(11), 23.

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