How to Get Funding for Your Startup

When it comes to financing your new business, you cannot rely on just one source. It would be like putting all the eggs in one basket, which is never a smart idea. Instead, an entrepreneur or a small business owner should get funding from various sources and diversify as much as they can. Here are some tips on how to get funding for your start-up. A combination of two or more of these options should be the goal.

1.       Personal Assets

This one is obvious. You can invest your personal assets like cash into the business when you start a business. It is usually done to prove to the investors that you are making a long-term commitment and want to take the risk for the project.

2.       Bank Loans

You can also take a bank loan if you need money quickly. The bank you choose must meet your specific needs and offer you options like personalized services or customized repayment plans. Banks usually invest in companies with excellent credit and a good track record. They also need you to provide a detailed business plan and personal guarantee as an entrepreneur.

3.       Love Money

This is the money lent to you by a loved one like your family, parents, spouse, colleagues, etc. This is considered patient capital as this money will be repaid to your loved ones when you start having a good profit.

4.       Angel Investors

Angel investors are wealthy people who invest in small businesses. As they risk their business, they get the right to reserve the right to supervise your company’s management. They usually keep a low profile, so you can find one through The National Angel Capital Organization (NACO) who is in your region.

5.       Venture Capital

Venture capital is the right choice for you if your start-up is in a sector with high growth potential like communications, information technology, and biotechnology. Venture capitalists will take an equity position in a company and help it carry out high-risk projects. So, make sure you pick investors who have ample experience and ask yourself if you are willing to give up some ownership to an external party.

6.       Business Incubators

Incubators invite future businesses to share their premises and some resources to grow and get adequate support. You can easily find an incubator for top sectors like IT, multimedia, industrial technology, or biotechnology. Find the details of business incubators in Canada at MaRS – an innovation hub in Toronto.

7.       Government Grants and Assistance

The government of Canada also offers numerous grants and other assistance for start-ups in all cities and states. For instance, in British Columbia, the government has set up a Coast Funds Economic Development Fund and has initiated a Tale’awtxw Aboriginal Capital Corporation (TACC) Business Equity Program (BEP). There are more than 80 grants and other sources of start-up funding in Canada. Get the complete list here. For more about business grants and financing options offered by the government, click here.




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