Raising capital is never an easy task and often requires a lot of determination and patience. There are a number of ways that an entrepreneur can raise capital for their small business, however, before using any capital collection methods, always remember to have a business plan to show to your investors.
Below are a few ways that a small business owner could raise capital.
1.Raise capital from friends
A person can always contact their close friends to get some money to raise capital. Make sure that there is something in it for them. You can ask for money and then pay it back with interest and within a payback period, or you can add them on as partners in your business.
2. Angel investors
As the word states, angels are always a good point of contact when you need to raise capital for a small business. In a business sense, angels are very rich individuals that enjoy helping entrepreneurs in their business ventures. Angels are usually professionals that need to see a proper business plan before they will even think about investing.
3. Family members
Family members can be an entrepreneur’s first point of contact to raise capital. The thing about family is that they will always be willing to help and support a good idea with financial aid. Sometimes, the amount of money collected from family members may not be enough, however, it is a start.
4. Private investors
Private investors are always willing to invest money into new and strong business ventures due to their hope of getting a large return on their investment.
5. Venture capitalists
Contacting venture capitalists is also a great way to raise capital, however, it is often one of the hardest. Venture capitalists have very strict terms for their investments. Venture capitalists will also be able to provide sound business advice and help you make business decisions so that your business grows and survives.
6. Raise money from banks
One great way of generating capital for a small business is to contact a bank for a loan. Most banks would be happy to provide a loan to an individual provided their credit rating and history is good.
7. Ngo’s
NGO’s, or non-governmental-organization, are also very helpful in raising capital for a small business. Keep in mind that the NGO may not be able to provide financial assistance directly, however, they will be able to guide you in the right direction to reliable sources of capital generation.
8. Investment bankers
Investment bankers are able to help an entrepreneur raise the capital they need for their small business but they must go to the general public for help. This means that you may end up losing some ownership of your business since your business will be divided into shares and offered to the general public.
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