The landscape for those entrepreneurs looking for investment for their business idea is very different now than it was a year ago, and there are many lending companies which have tightened their belts. A good friend of mine works for Sertant Capital, who lend money for the purchase of specific equipment, and she has been telling me how the protocols around lending have changed a lot given the uncertain climate which we all find ourselves in.
If you do have a great business idea and you need some funding to get it off the ground, here are some things to first consider.
How Much Can You Get First
The first thing to consider here is how much money can you secure without taking money from investors or business lenders. This could be a personal credit card, support from family or perhaps even a show of faith from friends. The more money that you can get which isn’t subject to being paid back, the better that it will be for you.
Considering Venture Capital
A venture capital investor is someone who will provide you with money and they will take a stake in the business, usually up to around 49%. This may sound like a lot but if you are able to get a VC which has experience in the industry into which you are going into, then you will find that you 51% could be worth far more than a 100% stake without the VC on board. This is not a deal for everyone of course but it is certainly something that is worth considering.
Do You Have a Watertight Plan?
If you are going for funding then you are going to be scrutinized more at the moment than you would have been before. Given the uncertain landscape which we are living through, those who are lending are going to want to be sure that they are going to be able to get their money back and it is on you to prove to them that you have the mind and the drive to do so, and that you have gone through the numbers in order to back that up.
Do You Need It?
Ultimately you have to consider whether or not you actually need this money or if you could possibly do it on your own. This will of course slow down the progress of the business but it will be a far less stressful way of operating. You could look to take ons one personal debt of course or alternatively you could bootstrap it and crowdfund in order to get the money together which is needed. This is a tough option but it is one which you could consider, as it would completely remove the need for you to go out there and look for funding, instead giving you the chance to spend that effort and time on your business.
These are tough times but if you think you have a great idea then push to make it happen.
