As rapidly as the social media space is evolving, there’s always a high demand for companies that can help other businesses navigate these murky waters. If you’re interested in creating your own digital marketing venture, getting funding is one of the crucial pieces to the puzzle.
4 Tips for Getting Your Startup Funded
There’s a huge misconception in the startup world that ventures regularly attract millions of dollars in investments before they even open up shop. The reality, however, is much different. Very few startups get large investments. Instead, they manage to generate a few thousand dollars in loans and must prove steady growth before they’re able to seek out larger investments.
If you’re still in the beginning stages of launching a digital marketing or social media startup, it’s imperative that you don’t try to do too much too soon. Instead, take things slowly and work on obtaining manageable sums of funding so that you can grow at an efficient and sustainable pace.
Here are a few specific tips to get your mind churning:
1. Get a Personal Loan
One of the first options to consider is a personal loan, which allows you to borrow a specific amount of money for a particular amount of time. The beauty of this type of loan is that you don’t have to put up any collateral to secure the loan – not to mention the fact that you get the money in a lump sum and enjoy a fixed interest rate.
“Loan amounts range from several hundred to more than ten thousand dollars, and repayment periods range from a few months to several years—all depending on the loan program,” RISE points out. “Personal loans are available from traditional banks and credit unions, and also from online lenders.”
Also referred to as installment loans, personal loans are preferred for their flexibility; an IVA is one form of personal debt consolidation. In addition to using it for business expenses, you can also use it in your personal life to cover emergencies, debt payments, and even home improvements.
2. Ask Friends and Family
Did you know that funding from friends and family is still one of the major funding sources for new ventures? While not everyone has the option to secure funding within their personal network, it’s certainly a viable choice for those with connections.
The key with friends and family funding is to take a professional approach, as you would with any other potential investor or lender. It’s also important to err on the side of caution, so that you don’t burn any bridges.
As entrepreneur Martin Zwilling suggests, “Ask for the minimum amount you need to reach a significant milestone, with some buffer for the unknown, rather than the maximum amount you can possibly squeeze out.”
3. Try Crowdfunding
One of the more novel approaches that we’ve seen work dozens of times over the past few years is crowdfunding. With the right crowdfunding backers, you can reach the masses and gain access to people outside your immediate circle. But in order to successfully leverage this method, you need a plan.
“You must know your vision, your idea, or your product. If you can’t explain to your audience exactly what it is that you want to achieve by launching, your fundraising efforts will be in vain,” entrepreneur Jonathan Ely writes. “Likewise, a successful crowdfunding campaign requires you to lay out as much information regarding yourself and your product as possible in order to attract backers.”
4. Build Business Partnerships
One of the more unconventional, yet effective methods is to use strategic partners to get your venture going. This requires a considerable amount of legwork on your part and can only happen if all of the circumstances are right.
In order to fund your startup via business partnerships, you have to find other entrepreneurs and businesses that stand to gain so much from your product/service that they’re willing to help foot the bill. It’s challenging but possible.
Get Your Startup Off the Ground and Running
There’s no playbook for obtaining startup funding. Anyone who tells you that they have a perfect formula is being misleading. In reality, startup funding is about making smart, disciplined moves that allow you to attract small, manageable sums of money. You then prove that you can use this money well and facilitate growth. As your startup grows, you can then get a little more aggressive and pursue bigger opportunities.