Are you at the stage of your business where you need business funding or someone to invest in your business idea? It happens to almost all entrepreneurs and that’s a sign that you’re growing.
You have a great business idea, but you don’t have enough capital to finance it, right? Let’s talk about how entrepreneurs or business owners can get funding for their idea or startup.
Some great business ideas are dead because of inadequate funding, and some are still running at a spot with no result to show at all. The problem sometimes is not really “how” but “where” to get the fund.
On this page, I will discuss just seven (7) easiest ways to get funding for your business idea and then, briefly discuss how you can get the fund.
What is Business Funding?
Business Funding is simply the act of the resources needed to finance a project or business, in this context. The resources can be in form of anything that can finance a business.
So, when we say Business Funding, it does not always mean ‘MONEY or Capital.
Business funding includes getting team members who spend their time and effort, getting pieces of equipment, paying for some necessities such as a company or business registration, and marketing strategies. If you think about this, you will notice that everything can be achieved with “Money”.
In essence, you need money to finance and grow your business, to get the “resources” needed to make your business work the right way you envisioned. And that’s what we’re going to discuss now.
7 Ways to Get Business Funding to Finance Your Business Idea
#1 Personal Funding
The first way to get started with business funding is through your personal financial investment. Of course, it is your Startup or business idea and you should be ready to invest in it.
If your business needs $10,000 and you have more than that in your bank account, you should invest some part of, or all the $10k needed. If you’re afraid that you might lose the money, then you don’t need to continue the business because your instincts have failed you already. How do you want people to invest in your business idea if you personally don’t trust the idea?
Another thing I will like to mention about personal business funding is that some people have a great business idea but nothing to finance it personally – If you’re in this category, I’m sorry to tell you that you’re not ready to start a business yet.
What you need right now is a job or a skill to earn money, not a way to be loaded with ideas but no business funding and be stagnant.
I’m not saying you should not have a big dream to become a business owner, but an African proverb says “By crawling, a child learns to stand”. If you really want to stand and grow big, you need to crawl first, you need to start building from yourself.
ALSO READ: Top 10 Apps to Manage Your Personal Finance in Nigeria
Although sometimes, personal funding might not work especially if you’re still a student or you just lost your job. Is there any other way to get business funding? Yes!
#2 Ask Family Members & Friends
If you can or cannot finance your business yourself, then the next people you should meet for business funding are your friends and family members. Although they are close to you, when asking them for money, you should treat it as business, not as help or their obligation. It is your business, remember.
To get the funding from your family members and friends, you should have a good business plan for your business idea to get them interested in investing their money.
This part of getting business funding may not work for you, especially if your friends and family members think you’re richer than them and/or they rely on you. But try to speak to them first and see if it’ll work or not.
#3 Look for Business Grants
Another way you can get business funding to finance your business idea or startup is through grants.
What is Grant?
A business grant is a money given to business owners (or entrepreneurs) to finance or support and grow their business. These business grants are most awarded by rich philanthropists, non-governmental organizations, governments, and big companies.
Business Grant Vs Business Loan
CREDIT: Keydifferences.com
A business grant is different from a business loan. The difference is that you must back a business loan, while you don’t pay back grants.
If you have a good business idea and plan, you should look out for funding opportunities like this, as it comes as “free money”. But not really free because those who give you the grants expect you to give back by using the funds wisely and employing people as the business grows.
So, we can frankly agree that the essence of business funding is to help small businesses grow and reduce the unemployment rate.
A good example of these business grants is the one provided by Central banks, the Ministry of Finances, the Ministry of Commerce, and other government institutions such as those who deal with Agriculture, Tech, and so on.
In Africa, there is a platform called “Tony Elumelu Foundation (TEF)” which is founded by the founder of Heirs Holdings, United Bank for Africa among others. Thousands of entrepreneurs in Africa are supported with $5,000 each year. So if you’re in Africa, you should look out for this.
#4 Consider Business Loan
Sometimes, you may not be lucky for business grants or getting assistance from your family members. But there are institutions ready to give a business loan to you as long as you have a good business plan and/or collateral.
To get this loan, all you have to do is visit your bank and meet with the manager to discuss it.
There are some people who claim they assist people with loans, you see their adverts almost everywhere. But I will advise you not to try them at all because most of them are loan sharks in disguise.
The best place to get a business loan is to visit your bank, as simple as that!
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Some people claim they help businesses with loans too, be careful before you jump into trying them.
#5 Try Crowdfunding
People are using crowdfunding to raise money for different purposes such as hospital bills, school fees, legal fees, and most important to finance a startup or business idea.
If you’re not that versatile with the world of the internet, you might want to know how crowdfunding works, right? Let me give a brief introduction to it
What is crowdfunding?
From the two words, “crowd” and “funding”, Crowdfunding is simply raising funds or money by a large number of people from different places to support or finance a particular project or bills.
These people decide how much they’re willing to contribute or in simple language, donate.
Crowdfunding is a method you can use to raise funds for your business. You’re not returning the money, it’s simply a donation. People across the world are ready to finance, support or help in one way or another, but also, people are stupid to be scammed of their hard-earned money.
That’s why you must be able to convince them why they should donate for you. If you think this method of business funding is what you would like to try, kindly check out these top crowdfunding platforms (here).
#6 Angel Investing
It’s not the regular angel you’re thinking of, but yeah, they’re like angels (God sent people) who can help fund your business. These people are called “Angel investors”.
Who is Angel Investor?
An angel investor is a wealthy individual who provides funding or capital to finance small businesses or startups in exchange for part of the company’s ownership (equity).
Like I said, angel investors, are like God’s sent. They are interested in funding your business at its early stage (when you are just starting). When other investors are not ready to give you funding, angel investors will be glad to chip in and give you that funding.
Remember that these angel investors are rich individuals, so you have to look for them. If you’re in Nigeria, you can check this blog post on top angel investors for business funding.
#7 Venture Capital Funding
Corporate Finance Institute defines venture capital funding as: “A form of financing that provides funds to early-stage, emerging companies with high growth potential, in exchange for equity or an ownership stake.”
Venture capital investors or Venture capitalists (VCs) are like angel investors but on a ‘Pro Max” level. Because VCs will provide a lot of money to fund your business or company as long as they see potential in it. Angel investors are individuals, but venture capitalists can be a company or a group of people who come together.
You’ve heard of Kuda Bank or Flutterwave raising millions of dollars to finance their business, right? Do you know that companies like Facebook, Uber, Airbnb, and other big companies in the world are once backed or supported by venture capital funding?
Venture capitalists are so rich to provide business funding for your business or company as long as it has the potential for growth and of course, the VCs will be a part of your business’ ownership.
Think Before You Decide
Before you think of hunting for business funding, you have to think and be sure if you’re ready. As I said, people believe in potential, if your business or startup lacks the potential to grow, then no one is going to invest in it, including your family members and friends.
If your startup has the potential to grow, try as much as possible to take the business out of the idea stage. I mean take action with the little you have and the people around you.
Another thing you have to prepare is a good business plan that you can always submit to those who might be interested in investing, giving you a loan, or connecting you with investors. If you’re not good at preparing business plan writing, hire someone to do that for you.
Note that some investors are taking part in your company, I mean, they’re taking part in business ownership. The more investors and funding you get, the more the chances of knocking yourself out of the business.
Just think before you decide.
That’s how to get business funding to finance your business or startup.
This post “Business Funding: 7 Ways to Get Funding For Your Business Idea or Startup” first appears on gbolamedia.com, do not copy without permission.
Building a successful startup requires a lot of steps but a major one is finding the right co-founder or co-founders. Compared to marketing, financing and other particular factors in creating a successful business, finding the right co-founder is quite a herculean task.
If you are not lucky to find the right co-founder, then your startup is dead already unless you get the perfect one as soon as possible.
Some people are so selfish that they don’t want anybody to join hands with them as executives in building a business, they want to have 100% ownership of the startup. If you have this kind of mentality, you should rethink or start a small business and take full control of it.
But if you are thinking of building the next unicorn, then you need people to work with you.
In this blog post, you will learn how to can find the right co-founder that will help you build that idea in your head. But before we dive into the nitty-gritty of finding the perfect co-founder, let’s answer these 3 important questions:
- Who is a co-founder?
- Why do I need a co-founder?
- What are the qualities of the right co-founder?
Who is a Co-Founder?
According to Indeed.com, a co-founder is a member of the executive team who played a role in the founding of a company. This person typically works with other founders to create and launch a business.
You know that a founder is someone with the idea of a business. But due to the fact that no one is an island of knowledge, oftentimes a founder may not have enough funds to finance the idea, or the human resources required to bring the idea to reality. That’s when the idea of having a co-founder comes in.
A co-founder works hand-in-hand with the founder to establish the business and make it successful.
This means that it is possible for a company to have both a founder and co-founder(s) if the business idea came from one person and the other just came later to implement it. In another light, if two or more people put their heads together to formulate the business idea, then they are all co-founders.
A co-founder Vs a CEO
A co-founder may or may not be the CEO. A CEO is the Chief Executive Officer, which means that a CEO is the acting leader of the organization. Most times a founder/co-founder is also the CEO but sometimes a more experienced CEO is hired. Also, a hired CEO does not necessarily take the title of the co-founder since they may not actually take part in building the platform.
The job of a CEO is to coordinate and lead the team, create goals and targets, communicate with other entities, and shareholders, access risks, and so on. So basically the roles of a co-founder and CEO matter but one person can still hold the same title.
Why Do I Need a Co-Founder?
In founding a startup, you can decide to do it solo but it is much better to have a helping hand. The following are a few reasons why you may need to consider having a co-founder:
Being a solo founder is stressful
Starting a business is not an easy task. You will experience a reasonable amount of pressure In trying to put everything in place. The process; ranging from writing code, down to marketing, is not going to be a piece of cake. Sure you might have other employees to share the workload with you but there is a limit to where employees can help you that’s why you need a partner.
Brainstorming
“Two heads are better than one.” There will come a time when you might get stuck and need someone to help you up. Note that there is a difference between an advisor and a partner. You might get external advice, fine but you can’t expect someone that is not in it with you to actually know exactly what you need.
Emotional support
In starting up a business you’re in some kind of emotional roller-coaster due to the ups and downs. In this situation, you need someone to share the burden.
In this situation, a close friend or family member will not give you the kind of support you need at that time and to your employees, well you’re their boss and there’s a limit. So, you need a partner.
Think about finances and VCs
Building a startup can be pretty expensive and chances of raising funds or getting donations when you don’t have your product or the prototype ready yet are pretty low. The opportunity of working with a co-founder allows you to share the early costs of the business.
Recommended: YCombinator startup application guide
Besides, it’s very rare to find investors investing in a one-man business. If you’re concerned about your equity, think of this. Would you rather have 100% equity in a company worth $30,000 or 50% equity in a company worth $100,000?
The record of successful companies
Looking at a list of the most successful unicorns in the history of startups like Google, Microsoft, Apple, and Facebook, to mention a few. They all had co-founders when they first started. Although, many people forget this point because as time goes on the company gets associated with one particular person, especially the CEO who usually becomes prominent and famous.
For example when we think of Microsoft – Bill Gates, Facebook – Mark Zuckerberg. But, when we look into the earliest stages we would realize that they were co-founders. This should give a kind of insight into what pattern to follow as to choosing a co-founder or not.
What are the qualities of a good co-founder?
Now that you’re convinced you really need a co-founder, don’t stand jumping into the river without knowing how deep it is. I mean, you don’t select just anybody to be your co-founder.
Bill Gates and his co-founder, Paul Allen
There are some important criteria that the person you would want to consider as a co-founder must possess. Remember that you’re not aiming at a short-term relationship. Let’s take a look at some of them.
The skill
One of the mistakes people make in choosing a co-founder is choosing someone with the same skills they have. You should be looking for someone who is skilled in the areas you are not very skilled in.
If you’re good at building the product and writing the codes then ideally you should have a co-founder who is good at marketing, talking to users, and getting customers.
If you are going to have a team of co-founders you should be looking for varied skill sets not a group of duplicates.
Similar core values and vision
Your co-founder should be of a like mindset. If your vision is to take your business to the global stage then your co-founder has to understand and believe in it. If you have a can-do attitude and an always-ready spirit you most likely wouldn’t want someone who believes in taking things slowly and one at a time.
Although people have different ways of doing things that work differently for different people, you need a co-founder whose views go alongside yours or are at least very similar.
Realistic
Your co-founder should be someone who understands how businesses work. Not someone who thinks you will start making profits immediately after you start the business. An unrealistic co-founder will lose interest quite easily when their fantasies are not met.
Other qualities the right co-founder should include:
- A co-founder should be trustworthy
- S/he should be committed to the goal as you
- The co-founder should always be ready to adapt to new changes
- Ability to handle conflict and stress
- Such co-founders should be creative with ideas
Now to the bigger question, “How can I find the right co-founder?”.
When looking for the right co-founder, the best place to start looking is among people you already know, your co-worker or your course-mate or close friends. That is of course if you can find someone with the skills you are looking for.
And even if you can’t find a suitable person in your social circle, it’s okay. Just check the steps align below to know how you can get the right partner for you.
5 Ways to Find the Right Co-founder for your Startup
Explore your social circle
If you don’t have someone who has the skills you are looking for in your social circle then why don’t you try expanding your circle? Who knows, someone you know might actually know someone, who probably knows someone with the skillset or experience you’re looking for.
You could make a list of your tech friends then ask each one of them if they know someone with some particular set of skills and then make a list of those people they tell you. If you still can’t find someone suitable ask those new people you’ve been introduced to if they know someone.
That way, if you only have ten people on your lists and each of them tells you about ten persons each, bingo you have one hundred people you can ask to be your co-founder. Gradually, you have a lot of choices of people to choose from.
You can also use social networks like Twitter and LinkedIn to check for the type of co-founder you need and reach out to them.
Attend & Network at tech events
Another cool and popular way of finding co-founders is by attending events, meetups, and hackathons. Go out and actually meet people. You can look up these events where you think you’ll find a lot of relevant people that can have what you need.
This tech event includes the famous Google developer events, Open source communities like OSCA Fest, the tech seminars going on around you or you can look up Meetup.com. They have a website where you can find meetups all over the world and you can find the one close or relevant to you.
The essence of having a meetup or tech event is to learn together and network, but most time, people go to these events to snap pictures and have fun, and maybe you have been one of those people too. Well, the next tech event you will be attending should be to find a potential co-founder for your startup.
I know it’s not easy to network with a stranger especially if you are an introvert like me, but then, if you can’t talk or strike up a conversation with a person, how are you going to tell people about what you are building or build and why they need to use it?
So you have to start practicing now, imagine yourself pitching your startup idea to an investor, swallow the shyness and get that right co-founder!
Use co-founder matching platforms
There are quite a number of matchmaking platforms for startups out there. These platforms have nobody than those with ideas but looking for a co-founder, or someone without an idea but would like to become a co-founder to someone with a startup idea.
Some co-founder matching platforms to consider
- YC Cofounder Matching
- StartupAgents
- Techstars Startup Weekend
- CoFoundersLab
- Founders-Nation
- Founders2Be
- etc.
These platforms can be really helpful because they are majorly for finding co-founders so if you are looking for that perfect co-founder, then you should definitely check them out.
Online forums
Forums may not actually be created for finding co-founders, but you can make use of ones that have a lot of traffic. For example, Reddit, Quora, and Discord have groups dedicated to finding co-founders and they are loaded with people which means you definitely should check them out.
Also, these forums are international and you tend to meet people from different geographical locations so if you are interested in finding a co-founder with a different background to probably expand your horizon or your business then you should definitely use these forums.
Universities (or colleges)
Maybe you’ve probably read online that Bill Gates met his co-founder, Paul Allen in the late 1960s at Seattle’s Lakeside School when he was in eighth grade, Mark Zuckerberg met Eduardo Saverin at Harvard university and they both launched Facebook in 2004.
If we come to Nigeria, Shola Akinlade and Ezra Olubi who founded Paystack met in school. The three founders of Jobberman.com, the largest job listing website in Africa met each other at Obafemi Awolowo University, OAU
Another very helpful way of finding a co-founder is going to a college or university. This is actually very helpful in finding the perfect set of skills you need. For example, you need someone with business and marketing skills; go to a business school, attend their entrepreneur events and get to know people with the exact skill you need.
A piece of advice on finding the right co-founder
Watch before you leap, and not “surface watching”
In finding a co-founder it is important to note that you probably shouldn’t walk up to someone and say let’s start a company together. It is more advisable that if your potential co-founder isn’t someone you’re not sure you can work with, start by building probably a simple project together.
This way you get to see how devoted they are to work if you’re okay working with them and other basic stuff. It is also important not to rule out someone as a potential co-founder if they are only lacking simple learnable skills.
If you get someone who is ready to learn and open to improvement but lacks maybe that skill that can be learned easily, it is better to consider that person than someone who has all the skills but is not open to improvement or corrections.
Avoid future problems, agree on equity spilt immediately
Another important thing to do is the agree beforehand on the equity split. You both should agree on how the profit is going to be shared. Most times it’s 50:50 but you and your co-founder may have other plans.
Although sometimes you may have been working on the business idea before your co-founder comes on board but it’s still okay to make it 50:50 or something very close to that. But then, you guys must agree on it, either it should be 50/50 or 60/40 but a co-founder must have over 10% equity.
Agree on the titles
You should agree on who’s going to be the CEO of the company. The CEO title should be given to the person who would most likely be talking to customers and investors.
If you would like to be the CEO, then you absolutely shouldn’t co-found with someone who also wants to be the boss to definitely avoid future conflicts… Two captains can’t sail a ship unless you want to subscribe for an accident.
But wait…
You might also be thinking, “if I have a nice business idea, should I wait till I find a co-founder or should I just really go for it?” The answer is yes. If you have the idea and you’re really confident about it then go ahead. You should start building and also be on the lookout for a co-founder while in the process.
Sometimes you might not even get anyone to be a co-founder if they don’t believe in your idea but the fact that you’re already building and they can actually see your plan in action is a good way of attracting the perfect co-founder.
Conclusion: Finding the right co-founder
Once you find the right person and you have both agreed on the important things that have been mentioned above, It is also important to legalize things. You definitely won’t do that at the start of your company but when things start becoming big, then you should definitely have a legal agreement.
With the helpful suggestions above, you have everything you need to know about finding the right co-founder, and good luck in building the next unicorn, we can’t wait to see what solution you’re bridging to the world.
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