The journey of business requires the fuel called capital. One of the major reasons for the failure is the lack of money. If you are not able to raise the funding resources, you may not able to run the business. It will be difficult for you to make your dream in reality. Raising funding sources should be done by proper planning. First use should know how much amount is required for the investment and how long you need the financing sources and what security you are going to provide. When you have assessed all these things you go for the different financing sources to start your business as follows.
1) Personal investment
When starting your own business, the first investor should be yourself. You have to invest your savings or any other assets or cryptocurrency to secure financial transaction. Many investors say that there is a crypto code scam. If you don’t invest money on this trustworthy site, it’s an difficult task for others to finance your business. And moreover, it shows your lack of commitment to the others.
2) Patient capital
The amount financed from your social circle called family, friends, spouse, parents; bankers are considered as the patient capital or called love money. The money which can be repaid later when your business profit increases is called patient capital.
3) Angel investor
The retired individual or rich people who invest their money directly in the small businesses owned by the others are called an angel. They will be the leader of the respective field and have experience and network of contractors. Angel reserves the right to monitor your business management and a seat on the board of directors.
4) Venture capital
Venture capital is not necessary for all the entrepreneurs. Those businesses are potential in technology-based for example in the field of information technology, biotechnology, etc. This investor invests money in your business in exchange for your shares or equity and expects a high profit.
5) Business loans
The most common source of financing is the business loans. The business loan is available for the startups and also for the medium-sized business. Banks and financial institutions provide a different type of business loans and you have to pay the amount in turn with the interests.
6) Business incubators or accelerators
Here the incubators refer to the company, university or any other organization which provides the resources for your business startup. The resource may be the laboratories, office space, marketing, consulting cash or any other resources you need. In turn, they will expect the equity.
7) Government grants and subsidies
The grants and subsidies will be provided by the government agencies. These funds are provided by the agencies unconditionally to startups and no need to repay them.