You think your biggest start-up challenge is building that better widget, creating ingenious marketing campaigns or providing your industry’s best customer service. It might be all of those things, but your first challenge is obtaining the capital you’ll need to get your company off the ground.
Here are a half dozen possible resources, courtesy of Paul Saunders, CEO and chairman of James River Capital.
Bootstrapping — Use your savings or borrow from friends or family. That money might be hard to come by, but if you can access this valuable resource you might maintain more control of your business and avoid high interest charges.
Business loans — At least start with your local banker, especially if you have other loans there and your credit’s good.
Community loans — Sometimes regional development agencies and similar public-good entities are motivated to help nourish businesses that might, in time, pay taxes and hire locals. Ask your chamber of commerce for references.
Venture capitalists — These individuals or entities have money to lend and in-depth business know-how. But expect to give up some control of your company to your new VC partner.
Angel investors — This might describe your local doctor or retiring business owner with cash to lend. You might find such a resource in your own social circle or in those of friends or parents.
Crowdsourcing — The idea here is to raise capital online in small amounts from lots of strangers on the strength of your proposal. Crowdsourcing sites like Kickstarter run the proposals of entrepreneurs who might encourage thousands of people to each lend sums as small as five or ten dollars. The secret here is to generate excitement in your concept. Check out other successful Kickstarter campaigns before you create your own.
It’s never going to be easy to raise initial funding, but you might start your search with one or more of these ideas.
James River Capital is an independent investment firm founded in 1995 and base in Richmond, Virginia.