Woody is starting a new business. After drawing up the plans, he's not sure how he'll get the funding.
Not to worry, Woody: Buzz will show you the way!
Be Your Own Hero
If possible, investing in your own business (i.e. putting your savings toward the business) is a great way to:
avoid debt and paying interest
spend money without conditions
preserve your independence as a business-owner
Ask Friends And Family To Invest
Low-pressure pitch - practice for future high-stakes investment pitches
No debt payments/interest - your investors get a portion of your business
Added incentive to succeed - time to live up to the expectations!
If the business doesn't succeed relationships could become strained
Lower independence when considering opinions of your investors
Holding back when asking for what you want
It's a great option but be sure to think it through!
Ask The Government
Your national, provincial, regional, or municipal government might offer assistance, such as grants, subsidies, investments, and expert advice! Investigate what is available in your location.
Incubate Or Accelerate Your Business
Business incubators and accelerators are programs that help businesses get established and grow through cash-based and resource-based assistance.
Connect new companies with resources such as:
Similar to incubators, but for companies that are more developed but still need some support to become fully self-sufficient.
Ask Investors With Deep Pockets
Angel Investors and Venture Capitalists invest funding in companies they believe will succeed in exchange for equity (percentage of the business) or royalties (percentage of the sales).
Think Dragon's Den or Shark Tank!
Use their own money
Invest in businesses at various stages of development
Often provide mentorship and act as a business partner
Use pooled/company money
Invest in established businesses
Usually not interested in mentorship
Ask The Bank
To get a loan from the bank your business will be subject to an analysis of the "5 Cs":
Character - your credit history
Capacity - your debt-to-income ratio
Capital - the money you already have
Collateral - assets to back the loan as security
Conditions - details like the purpose, amount, and interest rates for the loan
Woody has 75% of the money he needs to start his first business and his friends have invested to provide the remaining 25%. He needs some mentorship to finish up his business plan and a space to hold meetings. Which option would you recommend to Woody?