Obtaining funding can be difficult for new business owners with a small or nonexistent team, but there are some effective ways to meet this challenge head-on.
Launching a business as a solopreneur or with a small team can be an exciting and rewarding experience, but it also comes with a unique set of challenges, particularly when it comes to accessing funds.
With limited time and resources, finding the right funding opportunities can be a daunting task for new business owners. However, there are little-known but effective ways for solopreneurs and small teams to raise capital and fuel their growth.
To help you tap into these underutilized methods, a group of successful business leaders shared some helpful funding options that can assist small startup teams to access the capital they need to turn their ideas into successful businesses.
1. Apply for local or government grants.
Raising investor capital isn’t easy in the early phase of your business. That’s why Josh Kohlbach, CEO and founder of Wholesale Suite, recommends looking for local or regional government grants first.
“Governments in many countries and cities try to support businesses by offering them valuable seed funding,” Kohlbach says. “These grants often provide access to various other valuable resources like mentorship, networking opportunities and more.”
2. Open lines of credit with little to no interest.
According to Matthew Capala, CEO of Alphametic, opening and using a line of credit that has low or no interest during the first year and then paying it down can be a great strategy for businesses that need access to a little extra cash from time to time.
“I used this approach with my business to be able to build a business line of credit and also to remain liquid in the early days,” Capala explains. “When you are a solopreneur, this is a much easier approach than with a team, but you can still use lines of credit in this way for expansion.”
3. Explore angel investing networks.
Like other types of investors, angel investors provide startup capital in exchange for equity or ownership of the company. One key advantage is that they tend to provide greater value in terms of resources for the businesses they back.
“Angel investing networks pool resources and expertise to identify investment opportunities,” says Kristin Kimberly Marquet, founder and creative director of Marquet Media, LLC. “To access these networks, solopreneurs and small teams can attend networking events, pitch competitions and industry conferences to meet potential investors.”
4. Try crowdfunding to raise money quickly.
Syed Balkhi, co-founder of WPBeginner, recommends crowdfunding as a viable option for small businesses or individuals selling single products.
“Sites like Kickstarter, GoFundMe and others are popular platforms that allow entrepreneurs to connect with an audience and raise money for their projects,” Balkhi says. “This works especially well in an age where people want connections with brands and to co-create something.”
5. Offer pre-sales on your products or services.
If you’re in the pre-launch phase for your product or service, Chris Christoff, co-founder of MonsterInsights, advises running an advanced sales campaign at a special price to generate preliminary funds and interest.
“It’s worth mentioning that you should only use this strategy if your product and associated features are set in stone,” Christoff adds. “You don’t want to make promises and then change things at the last minute.”
6. Participate in industry-specific accelerators.
According to Stephanie Wells, co-founder and CTO of Formidable Forms, entrepreneurs can participate in industry-specific accelerators that can help them raise investment in exchange for a certain percentage of equity in their company.
“Participating in such programs can help refine your pitch, attract potential investors and present your startup in the right way to generate the required funding,” says Wells.
7. Create additional sources of income.
Developing additional income streams that are related to your primary business can be an excellent way to bring in more money for your company.
“Examples include selling affiliate products on your website or through your videos, offering your services as a consultant and creating either physical or digital products you can sell,” says Kalin Kassabov, founder and CEO of ProTexting.
Register for a free account and get Inc. Australia Today, our daily newsletter digest curated for entrepreneurs.