Fundraising for your Business
There are two sources of funds for funding your own business. They are:
Your own money Your own money is a pretty clean cut source. It refers to your savings, funds from immediate family and credit facilities either through an overdraft, cash advance on credit cards, or putting a mortgage on your property. For new entrepreneurs this could be quite a risky move, as first and second businesses have a high failure rate. You may wish to raise external funding to protect the bulk of your savings. It is inevitable that you will commit some of your own money, this shows commitment to the venture and it will give investors confidence in your company. The upside: you will have more control in how your company is run. The downside: you will be assuming liability, likely in excess of what you had initially committed.
Other people's money Ah, the favourite source, especially for entrepreneurs who have a big idea, but small pockets. Before you rush out the door though, do take note. Investors are usually very savvy. They will want to see a return on their funds, and if you are expecting to see a Santa Clause-type character handing you cash to do what you will, you are going to be sorely disappointed. Almost all investors will want to
We'll look at each of these points in detail.
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