Primary ways to finance a new business

Primary ways to finance a new business

What are the primary ways to finance a new business? How would you expect to fund it in the first few years?

What are the primary ways to finance a new business?

What are the primary ways to finance a new business?  How would you expect to finance your business in the first few years?

What are 2-3 principles you will keep in mind as you go about securing the necessary finances for your business?

Watch these videos on:

Essential Rules to Securing Startup Capital: http://www.inc.com/david-steinberg/2-essential-rules-to-securing-startup-capital.html

Reasons to Offer Equity to Employees: http://www.inc.com/joel-holland/3-reasons-to-offer-equity-to-employees.html

Here is an overview of some of the more common methods of financing a business:

Firstly, Savings. Perhaps the easiest way to finance a business is to use your own money.

Secondly, Credit cards.

Thirdly, Friends and family.

Fourthly, SBA Microloan Program.

Fifthly, Accion.

Also, Angel investors.

Further, Business loans and lines of credit.

Moreover, Factoring.

Here are a few tips on the procedure you can adopt, in order to source for the required funding for your start-up.

Firstly, Bootstrapping your business.

Secondly, Crowd funding

Thirdly, Seek Angel Investment for Your Start-up.

Fourthly, Seek Venture Capital for your Start-up.

Fifthly, Seeking Funds from firm Incubators and Accelerators.

ALSO, Source Funds by winning contests.

Reasons to Offer Equity to Employees

Equity is a key part of start-up culture: it creates ownership among employees, who feel they are an integral part of the project, and have a financial incentive in seeing it succeed. They invest in the company, and in this way they become part of its journey.

How do you offer equity to employees?

Get your first month free.

Hire your dream team.

Carve out your start-up equity pool.

Research competitive start-up salaries and compensation.

Set your vesting and cliff schedule.

Stock options or restricted stock?

Plan for grants and employee promotions.

Set an expiration timeline.

Decide if your employees can exercise early.