How to Fund a Startup in 2021

HomeJobsHow to Fund a Startup in 2021

Want to Score Cash For Free?

  • Survey Junkie: Earn up to $50 per survey with one of the highest-paying survey sites on the web. Join Survey Junkie Now
  • SoFi Money: Earning money for unlocking better features sounds like a dream. But this free banking app really pays you $100 with you switch your direct deposit to SoFi Money. Get SoFi Money.
  • Aspiration: This mobile banking app lets you do everything for free and takes no fees — ever. Better yet, if you join through this link you can get $100 in your new account.

Have the perfect idea for your new startup but don't have much money in your pocket? Here are 5 ideas to get your hands on funds for your startup.

Thinking about taking your career to the next level?

An increasing number of Millennials are deciding to take their careers into their own hands.

But if you’ve got a small business idea that could be a money generator, you still need to figure out how to turn it into a profitable business venture.

Regardless of whether it involves working in technology, gaming, catering, retail or construction, you might be tempted to draw upon your own savings or borrow funds from family and friends in order to get started.

However, this carries a lot of personal risks and could create problems later on in your development.


Want Free Money?

  • Aspiration: Want to get spotted a $150 for free? Simply sign up for Aspiration, and the free banking app will give you cash for free, you just relax while it gives you $150 just for opening a new debit card. There’s no catch. This bank account is legit and only takes two minutes to sign up for an account.

On the other hand, you could raise capital for each stage of your business’ development by exploring what options you have to fund a startup.

How to Fund a Startup

Millennials, don’t worry. There are ways to make your dreams become a reality.

Here are the smartest ways to fund your startup.

1) Investment Crowdfunding

For many startups, investment crowdfunding can prove to be an invaluable way of generating funds for your business using an online platform such as Kickstarter, Seedrs, and Crowdfunder.

It typically involves you appealing to investors and explaining the various benefits of investing in your business through creating articles, videos and holding live Q&A sessions.

However, in exchange for their funds, you’ll need to offer them equity in your business.

2) Peer-to-Peer Lending

Just like Investment Crowdfunding, Peer-to-Peer Lending (or Loan-based crowdfunding) also requires you to appeal directly to investors across an online platform and can be very useful for both start-ups and small businesses alike.

If you’re able to convince them of the potential of your business idea, they may decide to join a panel of investors who will pull their funds together to form an Unsecured Loan.

3) Venture Capital

Venture Capital works by pitching to an individual or corporate investor and offering shares in your business.

In order to convince them to invest, you must show that your business has high growth potential growth or is currently experiencing rapid growth.

As such, you’ll need to present a well thought out business plan, a short summary of what you do, team summary, clear financial projections (cashflow forecasts, bottom line, expenses, profits, and turnover) and a comprehensive understanding of how much capital you need to raise.

But before approaching investors, you need to assess which sectors they work with and check whether their goals align with your vision.

4) Advances

Advances are different from loans in that they’re merely forwarding the money that your business would have eventually earned (Future Revenue).

So if you’re looking to raise funds for your small business, you could benefit from products such as Merchant Cash Advance, Revenue Advance or Invoice Financing.

  • Merchant Cash Advance: In order to generate an advance for your business, you’ll need to submit card-based sales reports (credit and debit card) for the last 3 or more consecutive months. This will enable lenders to calculate your average card-based revenue. So if you regularly take around $25,000 per month in card sales, then the advance that you’ll receive could be in the same region.
  • Revenue Advance: Although similar to a Merchant Cash Advance, a Revenue Advance takes into account the whole of your business’ monthly revenue streams (card and cash).
  • Invoice Financing: If your business is able to trade using business-to-business invoices that are worth in excess of $5,000, you could release up to 90% of the capital they contain though applying for a short-term Invoice Finance agreement. Once the debtor has fully repaid the invoice, the lender will release a balance (for example, the remaining 10%) to your business minus costs and fees.

5) Business Loans

Business Loans are typically secured or unsecured, and can be invaluable in providing a large lump sum for small and established businesses.

Games That Pay You To Play - Yes, We're Serious

These 3 apps will PAY YOU to play games on your mobile device:

  1. Blackout Bingo - You can download this app and start getting cash rewards for playing bingo.
  2. Solitaire Cube - Earning money by playing games on your phone sounds like a dream. But this app really pays you for playing solitaire with cash rewards.
  3. Pool Payday - Earn up to $50 per month playing billiards with one of the highest-paying gaming apps on the web.

However, in order to make an informed decision, you need to understand how they differ and what that means for your business.

  • Unsecured Business Loans: allow you to borrow between $5,000 – $250,000 without the need to put unencumbered business assets (equipment, machinery, vehicles, and property) at risk. However, due to the amount of risk, this exposes the lender to, unsecured agreements are often subject to stricter lending criteria and carry more interest (compared with secured agreements). Nevertheless, this remains a very useful option if you aren’t currently a homeowner.
  • Secured Business Loans: on the other hand, a secured product could enable you to borrow anywhere between $5,000 – $1,000,000. This time, you’ll need to present the lender with security using your unencumbered assets. Although this may allow you to borrow more capital, you run the risk of having your assets repossessed should your business default on the fixed monthly repayment scheme.

Most often banks simply aren’t willing to provide a business loan if you lack business history or profits. If you’ve been turned down or delayed by traditional banks, alternative business funding is the way to go.

Ready to Start Your Own Business? Go Get It!

Starting your own business can feel very intimidating.

On top of forming an effective business plan and getting your basic day-to-day operations in order, you also need to ensure that you’re able to support your business’ growth.

Fortunately, these options to fund a startup are able to help, giving you access to a wide range of finance solutions for funding your startup.

GoDescription
aspiration

Want Free Money?
Aspiration

Simply sign up for Aspiration, and the free banking app will give you cash for free, you just relax while it gives you $100 just for opening a new debit card. There’s no catch. This bank account is legit and only takes two minutes to sign up for an account.

Learn more


The Best Apps to Save You Real Money

We are on our phone a lot, right? Wouldn't it make sense to save money with the best money saving apps?

AppAt a glancedownload
aspirationAspiration
★★★★★
Get a $100 bonus at Aspiration when you open and fund an account with $10 or more. Then use your Aspiration debit card to make at least $1,000 worth of cumulative transactions within 60 days of account opening.
CLAIM $100 BONUS
robinhoodRobinhood
★★★★★
Open a new account in the next 24 hours and you could get up to $200 in free stock.
CLAIM FREE STOCK
Truebill reviewTruebill
★★★★★
This free app delivers on its promise to save you money effortlessly. You can use it to lower your bills, cancel unwanted subscriptions and bill negotiations.
SLASH YOUR BILLS

About the author

Brian Meiggs
Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of My Millennial Guide, a personal finance site helping you put more money in your pocket. He helps millennials follow the smart money in order to increase their earning potential and start building wealth for the the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Yahoo! Finance, NASDAQ, Discover, MSN Money and more.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

On a similar note...

Explore More On

7 Best Bank Bonuses and Promotions of April 2021

ImageDescriptionlearn-more
aspiration★★★★★This Company Will Give You $100 for Opening a Free Account
Boost your savings and earn up to 1.00% APY interest on your savings. Get up to 10% cash back on your purchases. Get $100 bonus when you spend your first $1,000 with your new Aspiration Plus Card.
COLLECT $100 BONUS
personal capital★★★★★
The First and Only Interest Earning Crypto Account
Receive up to $250 Bitcoin bonus when you make qualifying deposits over the first 30 days. Receive up to 8.6% annually on your crypto. Join the most trusted financial services for crypto investors on the market.
CLAIM $250 BONUS
personal capital★★★★★Get Up $200 in Free Stock for Joining
Commission-free stock, ETF and options trades. Get a free stock worth up to $200 when joining (must complete application). Simple, easy to use investor platform with no account minimums.
GET FREE STOCK
sofi★★★★★All-In-One Investing That's Easy to Use
Tired of Robinhood? Invest in stocks, ETFs, crypto, or automated investing in all one app. No commissions for stocks and ETFs. Complimentary access to SoFi Financial Planners.
INVEST NOW
personal capital★★★★★The Smart and Free Way to Manage Your Money
Take control of your finances with the perfect union of technology and highly personalized service. Get access to free online financial tools, including retirement planner, investment checkup, net worth calculator and more. Digital-first wealth management advisor with 24,000 clients in 50 states.
SIGN UP FREE
blooom★★★★★401K and IRA Management
Start your free 401k and IRA management now. Find and reduce hidden fees. Improve your diversification.
GET FREE CHECKUP
cit★★★★★Enjoy the Benefits of a CIT Bank Money Market Account
A CIT Bank Money Market Account helps you get more from your savings with interest rates for maximum growth. Earn over 7x the national average with high-interest rates. It now pays to open a money market account with CIT Bank.
OPEN ACCOUNT
My Millennial Guide