How to Raise Money as a Young Entrepreneur
Feb. 10, 2010
27 Comments
You have a great idea, you put together a plan, now all you need is some money to get started. Every business needs money to get started whether its an e-commerce business in need of buying some inventory, or simply a blog that needs hosting, a domain name or a designer.
But raising money for an entrepreneur is often one of the most challenging aspects of starting a new business. If its $1,000,000 or even just $1000 it’s never easy…
Before you start your funding raising effort, you need to decide what you are willing to give in exchange. It can be a piece of your company, a percentage of the benefits or simply a loan.
Surprisingly, I could not find a lot of resources on the web on the subject so here are some tips and ideas that I would like to share.
You:
As painful as it might sound, you probably will need to start by going into your own savings. By putting your own money on the table it shows that you’re committed and will encourage others to join you. Also by putting your self on the line, it can give you the extra determination to always go the extra mile and make sure your business succeeds.
Family and Friends:
Ask them to give you a hand, after all that’s what they’re there here for. Ask your family if they’re willing to “invest” in your business. Grandparents are usually open and eager to help if they can. Talk to your friends and get them excited about your business idea.
Competitions:
Enter a contest to win money for your business. There are always many running such as: The Dell Social Innovation Competition, TLP and others if you search on the web. Also many schools run competitions such as MIT, Stanford, Indiana, UNC and more.
Online:
There are also many ways to raise money online. If your business is a non-profit, you can use widgets such as Chipin to collect money for your idea. Create a page dedicated to raising money with Create a Fund. Use Paypal to ask for donations.
Angels and Venture Capitalists:
Angel investors are private investors who usually invest small amounts in start ups. Venture capitalists invest other peoples money. There are angels willing to invest with teens but venture capitalists are usually not a common solution for teen entrepreneurs.
If you have any additional ideas, feel free to share them below.
Great Reads
27 Responses to “How to Raise Money as a Young Entrepreneur”
Trackbacks/Pingbacks
-
-
Feb. 10, 2010
[...] [...]
-
-
Feb. 10, 2010
Social comments and analytics for this post…
This post was mentioned on Twitter by thePromoterTV: RT @entrepreneurpro: How to Raise Money as a Young Entrepreneur http://su.pr/2BqwAy...
Author
Hey Ben great post, very informative.
Raising money requires a lot of commitment from the entrepreneur. They will always need to be focusing on the end goal.
You know what they say – ‘you gotta do what you gotta do’ just make sure its legal!
Aaron Darko´s last blog post: A Check Up From The Neck Up? What?!
Hey Aaron,
Thanks, yes it does, and it requires a great deal of efforts. Regards!
This is one of the major issued I had when I was starting out. If you are over 18 you can apply for personal and business loans, depending on how much you are looking for. Establishing business credit is an option and thats what I specialize in. But it takes some time, but when done properly you can raise a considerable amount of capital..
Marc “business Credit” Augustine´s last blog post: Dell Business Credit . Some detailed information
It could be a problem for many, especially when below 18. I see that you are an expert on business credit, I’ll definitely be checking that out on your blog.
Great post, Ben. Starting up is always not easy for an entrepreneur especially in terms of finance, but with these tips that you have shared I think the person might be able to come up with some enough money to start somewhere in his or her entrepreneurial endeavour.
Great post again
.
Shirley´s last blog post: How To Change Your Trending Topic On Twitter From Worldwide To Local
Thanks Shirley, I agree the financial aspect is always tough for young entrepreneurs. Hopefully these tips will really help out
Certainly its the start up fund that causes a firm to grow slowly. A properly planned big-bang would uplift the business from very beginning but you must manage the initial resources.
Your tips really worth noting down. Thanks.
http://www.psexam.com´s last blog post: Commenting on Other’s Post Won’t Increase Your Blog Ranking
Yes it is, these tips are ways to grow that fund. Thanks for the comment!
a recent development for businesses with worthy causes has been “crowdfunding” platforms like http://kickstarter.com
it’s a glorified way of raising money. it requires no equity to be dispersed (although you should be willing to give away equity if you really want to ramp up your business)
-adam w
Thanks for sharing that site, looks very interesting. Best regards.
I’d love to help someone, I have a blog dedicated to cash contests.
Love to help someone raise money?
Very good post ben.The tips you have shared is really helpful who want to start a business.:)
Thanks, I appreciate it. Good luck in starting your businesses in the future
My first thoughts to this are why not try and bootstrap and cashflow your business first? Today, with the internet and the many free blogging platforms, you can build a website with pretty much $0 money and then slowly upgrade when you can to something that you may want later on. Avoid debt as it will strap you to your business. I try and avoid investors as they tend to want to control what you do more so than you.
Dustin Taylor´s last blog post: Waking up early for free food…
Hi Dustin,
I understand your thoughts completely. Starting a business without debt has its advantages for sure. Although it has its disadvantages because for example, if you were to build a free blog, it would have to be hosted on a free domain name, and the theme probably wouldn’t be amazing. So it’s your choice in deciding whether to invest into your business, or start out free.
Raising money can be very difficult, even from family and friends. I’ve known this to cause severer problems, especially when a business fails to take off and there is no way to repay the loan. I’d stick to attempting to finance without the family, if you can save, or get inventive and raise the cash yourself another way the reward long term is matched only by the satisfaction you gain from knowing you ‘did it alone’.
Thats a good point. If your business did fail, it would be very hard to deal with your friends and family that gave you loans.
Competitions are definitely a good one. Make sure you prepare for those because the competition is always good. Come prepared and you shall succeed. Good points again Ben.
Alex Monroe´s last blog post: How long do you see yourself doing it?
Yes they are, especially if you put effort into it, then you have a chance to really win. Thanks Alex!
Raising money is really tasking. It requires patience and determination. Just keep on doing what should be done and you’ll reap the fruits in no time.
Free Competitions´s last blog post: Free New Apple iPad
I agree 100% the more patience and determination you have the more “fruits you’ll reap.”
Though funding is not that big a problem but it is one of the most asked question. You answered it brilliantly man!
Will share it with those who ask.
King Sidharth´s last blog post: Numbers are Killing Your Business
Thanks, well depends how serious your startup is. Great!
Serious Start-up? Sounds not fun.
Anyways, check this out: http://37signals.com/svn/posts/2305-podcast-episode-13-addressing-criticism-of-37signals-part-1-of-2
King Sidharth´s last blog post: Numbers are Killing Your Business