6 Smart Funding Sources for Small Business

6 Smart Funding Sources for Small Business

As Mark Cuban, co-founder AXS TV, quotes, “Sweat equity is the best start-up capital,” let’s face it, no matter how true the quote may stand, we all need that one backup that keeps us going and building castles out of the raw sand. Giving a definite shape to your business idea not only involves an excruciating level of planning but finding the right sources of finance for small business start-ups makes for the real deal. For most budding entrepreneurs, this process can be hard and daunting. What really makes it more frustrating is looking for internal and external sources of finance which do not work.

Here, in this post, we bring forth a list of authentic, tried-and-proven funding sources for small business ventures that actually work. Just remember, finding the right investor for your start-up is a game of patience and endurance. Rejections are part and parcel. The sooner you get over them, the more focused you shall be to attain success.

Types of Sources of Finance

Personal Savings
This makes for one of the best types of sources of finance for starting any business, provided if you can afford it. It gives you 100% control over your equity and decision making power of where and how to spend the money. Furthermore, you’re not liable to present any justification to anyone. You also exercise the freedom of operating at your own pace.

Borrowings from Friends or Family
As the name suggests, this money equalizes a loan taken from your spouse, parents, siblings, extended family members or friends. Banks claim this type of funding source as ‘patient capital,’ that needs to be returned/repaid later as the business flourishes and earns steady profits.

But some points are worth consideration here. The first and the foremost of these is borrowing money from a family member or friend can ruin your relationship in the event that your business doesn’t work out as expected or your level of profits is too low to start repaying the borrowed money. Furthermore, you’ll be liable to involve them in your business decisions and/or profit sharing ratio as well. In any case, it’s best to have a formal agreement signed by both the parties on agreed points relating to money, stake in the business and profit distribution.

Venture Capital
While there are many internal and external sources of finance that suit all types of business start-ups and entrepreneurs, Venture Capital certainly doesn’t. Right from the very first beginning, it’s vital for you to be aware of the fact that venture capitalists normally look for tech-driven businesses only which speak of high-growth potential, and belong to fields like information technology, biotechnology and communications.

Venture capitalists typically have an equity stake in the company and help carry out business activities as well. They also expect a healthy return on their investment, which is usually guaranteed to them at the beginning of their partnership. If you plan to opt for this type of funding source be sure to partner with a venture capitalist who brings along relevant knowledge and business experience with him/her.

Credits or Loans
If you’re looking for temporary or small investment amount, it’s best to raise it either through your credit cards or home equity loan. While these may seem as easy funding sources for small business ventures, they do come with a ‘Beware’ sign with them. If you fail to repay the amount on time, you could not only ruin your credit score, but also put your home in jeopardy.

Angel Investors
Angel investors are usually well-known, wealthy individuals or retired company personnel who hold the key interest in investing in small, start-up ventures. They are often the veterans of their industry and hold extensive experience. Angel investors or simply ‘Angels’ typically invest an amount that falls between $25000 and $100000. In turn of staking such a huge amount, Angels generally reserve the right to supervise the business functions and management practices. They also make for one of the Board of Directors of the company and assume profit sharing.

Otherwise known as Business Incubators, Accelerators usually offer support to start-ups at various stages of development. While there are some that provide high-tech services, there are many that help with other back-end activities such as job creation, revitalization and hosting, and sharing services. Technically speaking, Incubators invite start-ups and other fledgling ventures to share the same space along with their administration, technical resources, and logistics.

Such kind of funding partnership can last up to 2 years. Once a start-up is ready to function independently, it withdraws its services and terminates the contract signed.

Getting such kind of funding is considered as a blessing in disguise. You usually get an access to state-of-the-art sectors such as biotechnology. Multimedia, information technology, and industrial technology. It’s also a fact that businesses that partner with Incubators or Accelerators speak of a better rate of success during their first five years of inception that others.

Of all these internal and external sources of finance one thing is very clear, they call come with their own set of pros and cons. No matter what type of business you’re planning to establish, carefully assessing these sources of finance for small business start-ups is important.

For financial management is at the heart of any business. It is one area that can help drive it forward!


Best Crowd Funding Sites for Business Startup


Crowdfunding is not a new concept, from a long time books author used this concept to write a book. If enough people would subscribe or shows their readiness to buy then the book would be published. It creates confidence in the author that enough people would buy the product when we reach out to the customers. Also, it is a great tool for market research before starting manufacturing. The same concept applies into the product with a real money involvement. Artistshare is one of the oldest crowdfunding platforms. It started in 2003, mainly designed for creative artist who allows public to finance and raise fund for the creative project. After that Indigogo in 2008 and Kickstarter in 2009 gained huge popularity in the market.

Types Of Crowdfunding platform

  1. Reward Crowdfunding
  2. Equity Crowdfunding

1. Reward Crowdfunding
This type of crowdfunding may use variety of purposes, such as making a video game, software, scientific research or some social cause. Here, entrepreneurs sales their product before launching it. Nowadays this type of concept becomes very competitive. So, first entrepreneurs generate pledge by their friends and family to create importance of the product.

2. Equity Crowdfunding
Investors may get the percentage of ownership of the company, usually in the form of shares.

Crowdfunding is very popular in North America. Globally, this industry projected to reach US $1 trillion in 2025. In 2015, there were around 2000 active crowdfunding sites available to raise fund for entrepreneurs. We would not able to highlight all of them but, we will talk about best crowd funding sites for business startup.

  • Kickstarter
    According to Wikipedia Kickstarter got more than $1.9 billion in pledges from 9.4 million backers to fund 257,000 creative business or project. The platform is available to backers from all around the world and to creators from the US, UK, Canada, Australia, New Zealand, The Netherlands, Denmark, Ireland, Norway, Sweden, Spain, France, Germany, Austria, Italy, Belgium, Luxembourg, Switzerland, and Mexico. It is very popular in North America. According to Alexa, Kickstarters’ global rank is 479 relative to other sites in May 2017. Kickstarter is based on all or nothing concept.
  • Indiegogo
    This is one of the first popular sites to offer crowd funding. Indiegogo takes 5% of the total contribution. Also, creators should pay credit card or PayPal charges which are between 3.5% to 9%. In this, you can choose either funding model among all or nothing or keep what you raise. Indiegogo raise more than US $1 Billion and growing. It is helping every step from concept to shipping. According to Alexa, Indiegogo’s global rank is 1458 relative to other sites in May 2017.
  • Gofund me
    GoFundMe is a unique website where they are not an incentive-based website. Although they do allow projects which are designed to fund other projects. GoFundMe business model includes social cause, tuition fee or other noble cause. According to the website, this platform raised US $3B so far with 25 million donors. GoFundMe charges 5% fee in addition of around 3% processing fee. This site is very useful if you asking for donation. According to Alexa, GoFundMe’s global rank is 1248 relative to other sites in May 2017.
  • IdeaOfEntrepreneur
    First open source platform in the world where you can make business partners and grow business together. If you have an idea or want to expand your business, simply, you need to post your business ideas and investors can contact you directly. There is no fees or commission charged by this website. Investors could be your neighbor living on the next door or could be a person living 1000 miles away from you. This may change the era of entrepreneurship. Website claims to have 3000 active users and growing rapidly.
  • Razoo
    This website is claiming to raise over $97,000,000 and growing. The site relies on causes than profitable projects,Also, they do have a section for non-profit fundraising projects. Razoo charges very low rate as 2.9% and this may be the lowest possible among all sites. Razoo’s global rank is 1,49,000 relative to other sites in May 2017 which shows its popularity decrease over time.

How to Choose the Best Business Idea


For most people starting a new business, it is the very difficult decision. Because all has their own obstructions and problems. Many are think that starting a new business is an inscrutable procedure. They want to start a business, but they do not know that where they should start. Most people are scared to start. They scare of the unknown or failure, or even the success, others start to feel a lot in the wrong impression and they feel they need to come up with things that never before have done a new invention, a unique service in other words, they feel that they have to change their profession again. Something has before them that stop them from taking important steps. In fact they have not an idea for starting a business.

Ideas are the key is to find and act on profitable ones. The best businesses start with a best business idea, and many of hopeful entrepreneurs are known well that best business ideas are the key point of success. Choosing the best business idea is one of the most important parts of starting a business.

A quality idea is a great way that gives you wings. Time after time, when people bring a business investment proposal or an idea they want to take to market. Most people wrongly choose a business. Once your idea has developed into a full business, it will become the potential to make money in a given environment. Having a greater idea will enable you to create a sound business strategy to establish and grow your business into one that’s better than the competition.

If you are looking to start a profitable business or anyone wants to start a new business it can be hard time to find suitable Idea. Luckily, there is a site “Idea of Entrepreneur” that offers suitable business ideas platforms. It is one of the reputed organizations in the industry engaged in providing best business idea to its valued customers. It is not only provides Profitable business ideas but also connects both investor and entrepreneurs. You can simply contact with Entrepreneur or you can leave your massage and discuss business plan directly.

Our businesses ideas will save you time and money and help you start and grow your business. So if you have sound of business plan you need idea, investor or looking for project to invest your money, Idea of Entrepreneur is the best way for you.

At here, you will get multitude of great ideas that help you to increase your business. We organically grow our managers and believe in investing in people to take the business to the next level. There is no other business in the market that can promise you that if you are good enough. It is focuses on business and provides information for you. It will be working in a fast paced, quick moving environment with like-minded people who are always looking to improve and be the best.

If you have any suggestions, you can also leave your message and discuss business plan directly. It also offers solid support by via email, phone or contact forms on their websites.