Fundraising

Words from our Founder

Finding funds to make your idea comes to life can be a daunting task, but it can be also a great way to test if your product/ service is feasible or not.

8 ways to fund your startup

Unless you are very rich, you probably want to seek funding for your startup in the beginning to kickstart. Here are 8 different ways of funding with their pros and cons.

Bootstrapping

This is probably one if the most common method for entrepreneurs in the very beginning of their entrepreneurial journey. Bootstrapping means using only existing resources, such as personal savings, equipments, garage space, etc, to start a business. For example, Jeff Bezos started Amazon from his garage.

Pros
  • Quickest way to gather money
  • No debts, no stress
  • Maintain full control of your business
  •  Do not have to give up any equity
Cons
  • Limited amount of money
  • Limited growth for the business
  • Personal asset risk

Friends, family & fools

Friends, family, and fools are the 3Fs, which is also a popular funding choice beside boostrapping. Do you have a rich relative? Do you friends have some savings? Any fools that believe in your idea to the point that they are willing to invest in you?

Pros
  • Easy way to get money because they know you
  • Quicker than other methods
  • Maintain full control of your business
  •  Do not have to give up any equity
Cons
  • Risk of affecting your exisiting relationship(s)
  • Limited amount of money
  • Limited growth for the business

Crowdfunding

You probably have heard about some big crowdfunding platforms such as Kickstarter and Indiegogo. It is a great way to get funded and test your business idea at the same time. If the feedback is positive, then you know you are doing something right. See it as testing the water before going all in to produce your product. 

Pros
  • Good exposure
  • Test your business idea
  • Lower risk
  • Able to reach a wider group of audience
  • Able to get a large amount of funding
  •  Do not have to give up any equity
Cons
  • May not work without good marketing strategies
  • Risk of being copied
  • May charge a % fee from the raised fund
  • Limited crowdfunding campaign timeline

Grants

If you don’t want to have any debts, grants can be a good option for you. Grants are basically free money from the government, universities, corporates, or NGOs. 

Pros
  • Literally free money
  • Debt-free
  • Gain credibility
  • Maintain control of your business
  •  Do not have to give up any equity
Cons
  • Time-consuming in the application process
  •  Competitive
  • Comes with restrictions and conditions

Loans

Loans can be a great option if you are confident in your business idea and you need a larger amount of money. 

Pros
  • Maintain control of your business
  •  Do not have to give up any equity
Cons
  • May require collateral
  • Can be difficult
  • You may not be able to pay back

Angel investors

If you could not get any fundings from the above options, angle investors may be a good choice for you. Not only do they have the money, but also expertises and knowledge that will benefit your business. When you are approaching any angel investors, make sure if you know they have something valuable for your business besides the financial support.

Pros
  • Expertises and knowledge of angel investors
  • Networks of angel investors
  •  Larger amount of money
Cons
  • Have high expectations on your business
  • You will not be in full control
  • They may take equity
  • They may have terms and requirements

Incubators

Unless you are very rich, you probably want to seek funding for your startup in the beginning to kickstart. Here are 8 different ways of funding with their pros and cons.

Pros
  • Larger amount of money
  • Access to professional support and guidence
  • Networking opportunities
  • Better credibility 
  • More resources and infrastructure
  • More exposure
Cons
  • Have high expectations on your business
  • You will not be in full control
  • They take equity

Venture capital

Venture capital probably provides the largest amount of funding among these 8 options and they are mainly for early-stage and emerging startups. They also have higher expectations on the return of investment. 

Pros
  • Larger amount of money
  • Access to experts’ support and guidence
  • Professional business assistance
  • Networking opportunities
  • Assistance in hiring and building a team
  • Better credibility 
  • More resources and infrastructure
  • More exposure
  • More likely to raise fund successfully in the future
Cons
  • Difficult to secure one
  • Have high expectations on your business
  • You will not be in full control (for sure)
  • Less ownership
  • They take equity