6 STRATEGIES TO RAISE CAPITAL FOR YOUR STARTUP

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 Funding Your Business in Kenya.




According to a recent study, over 94% of new businesses fail during the first year of operation. Lack of funding turns to be one of the common reasons. If you are looking for ways to raise capital for your new business, you're not alone.

The salient requirement for any business to prosper is nothing short of capital. This is because capital is the basic ingredient for any business to thrive. Here are six ways to raise money you need for your startup.

#1. Bootstrapping your business

In order to succeed in your first time out in your business startup, you must ensure that you have some saved up funds you can easily access or funds you can obtain from friends or family. The process of utilizing personal saved up funds or funding from friends and family is known as bootstrapping or self funding. Obtaining funding from family and friends and family is a unique way to kick off your startup. Friends and family are usually flexible when it comes to servicing your loan debt much more than any other external sources. So if you approach the right friends or family members that support your idea, you can get some, if not all the funds you require to start up your business.

#2. Business loan

Small business loans are still a major stepping stone on the road to success for many entrepreneurs launching a new business. However, loan approval is not guaranteed. You will need to meet specific requirements, like having an excellent credit score and being in business for a certain period of time.

#3. Launch a crowdfunding campaign

Modern technology has made it easier for people to share their problems on an interactive social platform. Crowdfunding platforms are basically set up for individuals to pitch their business ideas or challenges to a community of investors or people willing to support their ideas or cause. How it basically works is that an individual makes a business pitch on the crowdfunding platform, he shares his business model and it's potential for growth. If his idea is bought by the crowd funders on the platform, they'll make a pledge to support his business model publicly and donate funds respectively.

#4. Get an angel investment in your startup

Angel investors are individuals with surplus cash and a keen interest to invest in upcoming startups. They also work in groups of networks to collectively screen the proposals before investing. They can also offer mentoring or advice alongside capital. Angel investors have helped to start up many prominent companies including Google, Yahoo and Alibaba. This alternative form of investing generally occurs in a company's early stages of growth, with investors expecting up to 30% equity. They prefer to take more risks in investment for higher returns. Angel investment as a funding option has its shortcomings too. Angel investors invest lesser amounts than venture capitalists.

#5. Seek venture capital for your startup

Venture capital funds are managed by professionals that have a keen eye for seeking out companies with great prospects. Their mode of operation involves them investing in a solid business rather than an equity. Once there is an IPO or acquisition of the business they are partnered with, they then pull out and seek other investments.

#6. Government programs that offer startup capital

Government programs that offer startup capital are an excellent way to source funding for your business. You are required to submit a plan that can be accepted by the grant committee. Once your plan has been scrutinized and approved, you will be provided with the funds to start up your business. If you need access to government bodies that offer startup capital click here:

Conclusion...

Employing the tactics in this guide can greatly increase the chances of survival of your startup. However, to truly stay competitive in the market, you must always interchange your funding sources. This provides you with some level of flexibility and over-dependence on one source of funding.


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Written by: Antony Moturi


   About the Author: 


Antony is a professional DJ, Pianist, Social Media Manager, Content Creator and a Blogger. Besides that he does professional Sound Engineering, Public Speaking and is a Youth Leader.

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