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While the internet appears to make funding your business without outside help look easy, you still need to put in some hard work. It is a tough world out there. Thousands of businesses are starting up every year and they all need funding of some sort.

On average 61 new companies started every day in 2017 in Ireland. That works out at 22,354 new companies registered, which exceeds the previous record in 1998 of 21,145 start-ups registered. So, how do you fund your own business without outside help? There are a few ways but you will need to decide whether you are willing to give away company shares or not. Or, whether the money is a loan. From asking for help from friends and family to crowdfunding, there are ways to raise the money you need to get your business off the ground.  

Seek funds from people you know

Though you may not want to seek funds from the people you know, they can be a good source of funding. Whether for a new venture or to help you expand your business, this makes sense as they know you and your passion to succeed. But, this can be a tough as it is a delicate situation. There may be more pressure to succeed. Failure would mean letting down the people you care about and losing their money.

In this situation, it is a good idea to treat them as strangers when you need their help. Have your expected growth figures handy as well as your business plan. This will let them know you are serious. Make your pitch professional. Offer either a percentage share in the company or to pay back the money based on your company’s actual cash flow. Give them a choice.

Crowdfunding is an option

Crowdfunding is an option for the right business. It can be a stepping stone to securing other forms of investment if successful. This is a great way to raise small amounts of capital or a loan. Keep in mind that failure rates are high as donations may not reach the target amount. If this happens, the company (crowd funding platform)returns the money to those who pledge to support you.

There are four different types of crowdfunding models:

  • asking for donations to support you
  • rewards based support or pre-payment for goods or services
  • peer-to-peer or loan-based pledges
  • equity investment for part of the company.

Crowdfunding takes up a lot of time. You need to prepare your campaign, manage and promote it online. You need to release a lot of information about your product or idea. So, your competitors will soon know what you are doing. Make sure you protect your intellectual property or someone could steal your idea.

Using crowdfunding to raise money is also a good way to test market demand for your idea. If people pledge money, then you know you could be onto a good thing. It is also a great marketing strategy.

What is more, if your campaign is a success it could attract the interest of bigger investors.

Angel investors

Angel investors are those who provide seed or start-up capital in return for a part of your business. And, they will want to play an active part in the business, offering their skills for you to learn from. They offer valuable management experience and knowledge in the industry when you are starting out. This can help you reach your business goals.

An angel investor is more interested in teaching you the skills you need for the future. After all, it is to their advantage to mentor you. They want you to succeed. When you achieve success, you both reap the rewards. This is how Uber and Facebook originally started up. But, on the other hand, if you fail then angel investors do not usually need to be repaid.

You need to make a decision on whether it is worth exchanging a chunk of your business and future earnings for what an angel investor offers. When, what an angel investor offers, is not worth what you need to give in return – then walk away.

These are just three options from many, but you will not need to sell your soul to achieve success. Consider what is important to you and what you can make work for your business.

Marc O'Dwyer

After completing a Graduate program in Marketing, Marc’s impressive sales career began at Allied Irish Banks, Pitney Bowes and Panasonic where he received numerous Irish and European sales performance awards and consistently exceeded targets and expectations. In 1992, Marc’s entrepreneurial spirit led him to set up his own business, Irish International Sales (IIS). Initially, this company was a reseller for Take 5 Accounts and Payroll software. Within four years, IIS became the largest reseller of Take 5 in Ireland, acquiring four other Take 5 resellers. He also found time to set up two mobile phone shops under the Cellular World brand and a web design company offering website design services for small businesses. In 2001, he bought the majority share in a small Irish software business, Big Red Book. At that time, the company was losing money. The company became profitable within two months, and Marc then acquired a payroll company to compliment Big Red Books Accounting products. In 2003, IIS were appointed as Channel Partners with SAP for their new SME product, SAP Business One. Marc sold his Take 5 business and concentrated on developing this new market for SAP As a result, by 2007, IIS was recognised as the largest Channel Partner for SAP in EMEA (Europe Middle East and Africa). In 2008, the IIS Sales Manager bought the Company from Marc in an MBO. He launched Big red cloud in June 2012, the online version of big red book, to date the company successfully converts 59% of trials into sales and the number of customers is growing rapidly. Marc continues to run both Big Red Book and Big Red Cloud which now support 75,000 businesses. He is a very keen sportsman, having played rugby for 20 years, represented Leinster at under 16 and under 20 levels, and league squash with Fitzwilliam Lawn Tennis Club for 10 years. Marc has competed in 11 Marathons, including the London and Boston Marathons, and has completed several Triathlons and Half Ironman races. He has also completed six Ironman Races in Austria(x2), Frankfurt (Germany), Nice (France) , Mallorca (Spain) and Copenhagen (Denmark)

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