Funding Tips for First Time Home Business Owners


In today’s highly competitive world, entrepreneurs face tremendous challenges in finding the funding they need for their startups. It is one thing to pitch an idea to a venture capitalist or angel investor, but another to pitch an idea that interests them.  Self-doubt is common among entrepreneurs, but the successful ones understand how to turn those doubts into winning pitches for money. Here are a few tips to help new business owners find the right investors and win critical funding for their startups.

Focus on the Right Investors
When searching for funding, entrepreneurs often fail to target the right investors. Many would-be home business owners don’t consider friends and family as avenues of funding. Before targeting high net-worth investors, first focus on family and friends for seed money. Often this option will get you some padding in your savings and a longer to time to pay back the loan.

Comparing Seed Investors and Venture Capitalists

New entrepreneurs need to know the difference between the two types of funding for their startup. If you only need a small amount of money to finance the business in the beginning, you are looking for seed money. If you need a larger sum, then you need the services of a venture capitalist or angel investor. Many venture capitalists require a certain percentage of control over the businesses they invest in, while seed investors hope to capture a percentage of the profits.

Perfecting that Pitch
In order to secure financing, new entrepreneurs must think like banks or venture capitalists while crafting their pitch. Recognize that banks are in the “smallest amount of risk possible” business. A well-crafted pitch sees things from the bank’s perspective and addresses all risk factors and any fears or doubts they might have. Start by having a detailed business plan, and craft a pitch that shows the value of your business.

A New World of Funding
Entrepreneurs that cannot secure financing from banks, venture capitalists, or angel investors often turn to online crowdfunding. This new wave of funding uses online portals where entrepreneurs can pitch their startups in an effort to secure small amounts of funding from multiple backers. Although crowdfunding is turning into a common solution for new startups, entrepreneurs must still present their businesses and win over investors. Use sites that can help you with the platform and give you a start in finding your audience.

New home business owners face tremendous challenges trying to take their startups from an idea to a winning business. However, if you can identify and address some of those challenges, such as obtaining capital, time management, developing winning marketing strategies, and proper cash flow management, you will reap immense rewards.

About the author: Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For more information on funding on your own, check out sites like Move Your Mountain or contact Brooke via Twitter @BrookeChaplan.

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