Is Venture Capital Funding Not Working Out For You? Here Are Some Alternatives

Starting your own business is not a piece of cake, even if it is a small venture. It requires a lot of planning, strategizing, thinking ahead, and funds to turn a vision into a reality. However, if your business takes off, then you will be living the dream. Till then, you have to put in the effort and the funds to get it started.

Let’s assume you have got a business idea that you are certain will be the next big thing so you start working on a brand name, its imagery, and how you plan to execute this plan to make your business a successful one. Now that you are through the planning phase and into the implementation phase, you are met with two choices: you can either fund it yourself or find investors to fund it for you in exchange for a small percentage.

Andrea/Pexels |Venture capital often comes from investment banks, wealthy investors, and other financial institutions

Most people, choose to go for venture capital, which is a financing type where investors put their money into businesses that, they believe, exhibit long-term potential. Venture capital often comes from investment banks, wealthy investors, and other financial institutions.

While venture capital funding sounds like a great opportunity, it is a difficult task to convince other people to invest in your business and many people don’t make it past this stage. Does this mean they should give up? No, instead they should look for alternatives, like the ones listed below.

1. Crowdfunding

When talking about VC alternatives, crowdfunding takes the lead as it is the most community-based and exciting approach to get people to fund your business. As the name suggests, crowdfunding is all about many people investing small amounts of money into your business in exchange for a minor percentage. You can take help from all the crowdfunding platforms that are now available such as Kickstarter, Indiegogo, Seedrs, and Crowdcube. 

Energepiccom/Pexels | Some of these platforms provide rewards while others deal with equity

2. Grants

You might have heard about grants in your college days because it is generally used as an incentive for students to participate in scholarships or research. But grants are given out for businesses as well. They require you to fill out an application and jot down all the details surrounding your business plan and why you think it will go big. Some countries provide grants depending on the industry that your business belongs to.

Clem/Pexels | Basically, convince the grant-giving body that your business is worth it

3. Small Business Loans

If all fails then you can always avail of this option. Small business loans are like your regular loans but they have a limit to the amount of money you get as a loan. It also has terms and conditions like interest rates and more so you have to be careful when opting for it. To get a small business loan, you have to have a good credit score and a solid background. The best thing about these loans is that you are most likely to get a positive answer from these banks.

With these alternatives to venture capital funding, you definitely can’t go wrong.