Almost all entrepreneurs want to raise money. It is natural and often necessary. The challenge, of course, is that many people need money to get started. And since the chance on an idea-stage business of becoming a success is about one in a million because most people just let their ideas go and never get started, raising money at the idea or planning stage of a business is extremely difficult. Nevertheless, in this article, I will give some tips for how you can try to raise money at the idea stage of your business.
First, Let’s Understand What Investors Want
We do have to be realistic. Investors prefer to invest in companies that are going after big markets, which have been started by proven teams. And investors also want those companies to already have been started, and growing. There are a few investors who may take a chance on an idea-stage company, but that is pretty rare. It is even more rare if the entrepreneur is a first-time entrepreneur. Here is a video on what investors are attracted to.
Additionally, take a look at AngelList for a list of possible investors. But don’t worry, investors are not the only game in town. There are other options.
Raising Money At The Idea Stage Through Loans
Getting a business loan to start a business is risky. It is rarely recommended. But nevertheless, entrepreneurs do it all the time. It actually, isn’t simple (or even possible) to get a bank loan for an idea stage company because banks are conservative lenders. Luckily, there are man micro-loan companies such as Lendio, Prosper, or Kiva where you can raise a small sum which is usually under $100,000 to get started with your business. We partnered with Lendio to help the users of my mobile apps get a micro loan. If you would like to see whether you are eligible for a small business loan, you can fill out this form on Lendio and they will get back to you if they are able to match you with a lender. Here is a video about the pros and cons of getting business loans.
Raising Money At The Idea Stage Through Grants
It is also very difficult but not quite impossible to get a grant for a very early stage business. You can check out grants.gov or your local state and city grants. You can also try to research various grants available through whichever communities you belong to. Here is a video explaining how to get business grants.
Raising Money At The Idea Stage Through Donations
Additionally, you can try to raise donations via crowdfunding. Crowdfunding is a relatively new way to raise money by getting donations from people online who believe in your project and your vision. Some of the top crowdfunding sites are KickStarter, and IndieGoGo . Here is a video tutorial on how to raise money with donations by crowdfunding.
Creative Ways To Raise Money At The Idea Or Planning Stage
There are numerous creative things you can do it you are looking to raise money at the idea stage of a business or a start-up. One example I like to give is starting an event series. Events can be very powerful because you can charge for event attendance, but you can also use the events to build relationships and to promote your business all at the same time. So if you can, try to see what kind of an event series might make sense for your business. If that is something you are interested in, here is how you organize and promote events.
And here is a video with other creative ways you can raise money for your business.
And here is a video summing things up with seven ways to raise money.
Writing A Fundraising Plan
One recommendation is to get your ideas organized when it comes to your fundraising efforts. Here is a video tutorial for how to create a fundraising plan.
How To Know How Much Money You Need To Raise To Move Beyond The Idea Or Planning Stage
When you raise money, you must know how much money you actually need to raise. Here is a blog post on how to understand how much money you need to raise in order to start a business. It is a matter of creating a cash flow statement and itemizing the costs and revenue over a time period which is required to get you to whatever milestone in your business that you need to get to. Here are video tutorials for how to understand how much money you need to raise.
And here is a video tutorial on how to create your cash flow statement.
Further Business Resources
For more business-starting resources, please take a look at our business planning mobile apps. Here is the iOS business plan app and here is the Android business plan app. Additionally, here is the iOS fundraising app. And here is the Android fundraising app. And here are our business apps on the Kindle. And here is an article where I give the argument that our Android apps are the best business apps on Android.
And please check out and subscribe to my YouTube channel where we cover many marketing topics.
Author: Alex Genadinikby