To raise funding, startups must explore creative opportunities
You probably have an idea you think can become a billion-dollar business in a matter of years, but you have no money to get the idea off your head.
Millions of entrepreneurs have faced and continue to face similar challenges. But those who have “made it” found a way to get started with the little resources they had.
So, before you consider jettisoning the idea and going back to your regular 9-5 grind, here are 5 creative ways you can raise funding at very early stage when there are no investors.
1. FIND A WAY TO RAISE CHEAP EQUITY: You can do this either by saving up some money or borrowing from friends and family. You probably already know how difficult it is to borrow money from Nigerian banks as a startup.
This is not to suggest that you cannot borrow from the banks. “Of course, you can, but it is hard because you will need collateral and as a startup, you probably have no assets anywhere,” said Tosin Eniolorunda who bootstrapped his company, TeamApt to millions of dollars in revenue, without raising a dime from investors.
2. GET YOUR CLIENTS TO START PAYING YOU UPFRONT: This is tough especially when you are still starting out and needs to prove that you can do the job. But if you need to stay afloat and do the job well, so that the client will be satisfied, you need to convince the client to pay a reasonable percentage upfront.
3. DO JOBS THAT ARE NOT IN YOUR CORE LINE OF BUSINESS: There is a popular company called Airbnb, specializing in shared accommodation. It is now worth over a billion dollars. But the founders sold cornflakes, cereals when they were starting out just to stay afloat. So, those are some creative ways you can use to raise money in your early days.
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4. SELL YOUR PROPERTY: To raise funding for your startup, you may consider selling your property. If you have worked before and earned enough money to acquire some property, you may consider selling it off. This will help you raise enough cash to stay in business until you have enough paying customers.
5. APPLY FOR GRANTS: Grants are non-refundable funds that are always given by foundations, government departments, social innovation centres and even investment funds.
Grants are always good ways to raise money because the money is not a loan and there is no limit to how many you can have access to.
You probably have heard of Tony Elumelu Fundation Fund, Diamond Bank BET programe, Google Impact Challenge, etc.
The process of getting a grant always involves you pitching your solution before some judges who determine if your solution is good enough to receive funding. So, all you need is a good, relevant solution that is scalable, and you can receive your initial funding through grants without necessarily approaching investors.
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