Starting up a new company is tough. You have to have all of your ducks in a row. There are several programs that you may need in order to keep those ducks in line. And, of course, you’ll need capital. But from where do you get this money?
There are several places from where you can get some start up money. One of the most common places is a Small Business Administration loan. The SBA will match you up with lenders who offer loans for your business. Other people you can turn to are angel investors. An angel investor is someone who invests capital into a company, usually in exchange for ownership equity. While some people aren’t comfortable with this, it is a great way to get some money to back the company without having to necessarily go into major debt. You can find angel investors in the U.S. at the Angel Investment Network.
The most common source of external investment, though, is the easiest way to get that money: your family and friends. About a quarter of all small business owners turn to friends and family for investments/loans within the first three months of starting their business, according to a ratings and review platform called Clutch. And it makes sense. People want to help those whom they know. Plus, more and more people are using fundraising platforms (such as GoFundMe and Kickstarter), which are shared with family and friends first.
If you’re looking to start up your brand new company but you’re struggling to get that capital, start with your loved ones first. They’re one of the most helpful sources you can find. Once you get your start up money and have herded your ducks, dive right in!