Ways to get a startup funded and help get a product out into the market. To get a loan is just a normal part, nowadays there are many other ways to raise the funds.
Small business loan:
Almost all cities and towns have a small business association which can help them to raise funds for their start-up. This is an easy path to raise the funds. You can also get loans at a fixed interest rate from here. Other advantages are you will get general resources for the information, networking, and mentor-ship, have clear conditions of interest rates and payment requirements and they don’t interfere on daily basis to get their investment back.
Apart from all these, the disadvantages of these are they don’t like to take risks so a start up business loans takes a lot of paperwork and proof of the profitability of your business. You may need to disclose each small detail related to your business idea to ensure them that you are are a worth it person to invest in you.
An angel investor is an individual with private wealth who usually is passionate about funding causes that solve a big problem in the world. An angel will usually fund a startup in exchange for a percentage of equity in the business. The pros are they have a great experience in the start-up funding and their team is expert in business connections. So, in a nutshell, they have roots in the market in which you are going to step in.
Angel investors will often serve as your mentor and guide in navigating the startup world just because they are financially invested in your success. Also, they will help you to receive startup funding without interest.
Cons may be that they will have a complete involvement in your business, though will be your helping bodies, at times may you feel lack of space for your business decisions.
Crowdfunding provides an opportunity to go directly to your customers to raise awareness and money for your business. In addition, sometimes entrepreneurs use crowdfunding first, and once they have proven the market demand – go on to raise money through venture capital firms (at much better terms) for the next phase of their business. This helps to keep a creative control on the funding models and also help you to reach your audience at right time.