It’s all about funding nowadays. Where can a small business get money? What about the credit crunch? Small businesses everywhere are in need of cash, and everybody has a different path they suggest in finding it. However, in any given situation, the best advice is always: “think outside the box”. That’s the real key to finding funding when traditional lending sources aren’t being near as generous. Consider these atypical sources when looking for some cash for your small business.
Surprising Sources of Capital:
A Mob and a Dating Site?
A mob of angry villagers
If you’ve designed lightweight, aerodynamic torches at least. Entrepreneurs with great ideas can now appeal to their target audience, while that very same target audience funds your project. With crowdfunding—also known as crowdsourcing—small business hopefuls can solicit a wider range of investors online. Anyone from your next door neighbor to the pizza delivery guy can view your business proposal and contribute funds. By reaching out to people who genuinely want to see this product made (not just those who want to make money off of your interest payments), you contact your customers and investors in one fell swoop.
Your frat buddies and sorority sisters
Even if Greek life wasn’t your thing, university networks are great resources. Alumni associations and school-centered social networks are usually packed with professionals who can help any business venture. This is especially true of business school networks, and according to OnlineCollege.org, the most powerful alumni networks can be found in large universities. You may think your schooldays were long gone, but the power of nostalgia and shared experiences will keep your connection strong.
Online dating sites
The entrepreneurial version, that is. Entrepreneur match-up sites work very much like dating sites: you come in with a profile and business plan, and you are either matched by a service or search on your own for a match. Investors can search for the small business plan of their dreams and vice versa. Sites such as Prosper.com and the National Small Business Investment Companies can help you find this funding, while other websites like PartnerUp can connect you with a business partner. You can even use these networks to collaborate with other entrepreneurs on developing plans or facing the unique challenges of running your own small business.
Your Facebook Friends
You may be hesitant to mix your personal and business lives, but many small business owners will tell you that running your own company is personal. Just be sure to choose your sources thoughtfully, and before you appeal to them, consider the terms carefully. For example, consider whether you are looking for a loan or if you want to offer them a share in the business. If your friends and family do invest, make sure to draw up a repayment plan and stick with it.
There is a magical group of financers known as angel investors. At their very best, angel investors, also known as business angels or informal investors, are prosperous individuals who help fund start-ups. While venture capitalists typically invest funds pooled from a group of people, angel investors usually invest their own money in exchange for convertible debt or ownership equity.
And these seraphims sure are lucky. According to a report from Harvard, companies financed by angel investors are significantly more likely to survive at least four years than other ventures. If you are ready to see the light, you can find angel investor networks online on websites like Investors’ Circle, Tribe of Angels and Alliance of Angels.