In today’s Silicon era, it seems that startups are finding success in nearly every corner of the market. This phenomenon contradicts the conventional description of the aftermath of an economic downturn, but success stories keep flooding the gates. Here are some creative methods that startups have employed to get their business up-and-running.
While this method is now familiar, just a few short years ago, it was virtually unheard of. Thanks to the proliferation of sites like Kickstarter, which allows inventors and entrepreneurs direct access to a host of investors, companies like Imla’Kesh Organics and the Coolest Cooler have been able to take their businesses to the next level. Imla’Kesh Organics, for example, is a Santa Barbara-based organics superfood company that sources its products from the Andes. Crowdfunding allowed them to open a warehouse for large-scale production. The Coolest Cooler, which you may have heard of, set a record with $13,00,000 in backing for its ‘smart cooler’ concept, which had an original funding goal of only $50,000. Soon, the company will be delivering coolers that play music, charge phones, include a blender, and more, thanks to Kickstarter.
2. Winning a Contest
Competition isn’t just important in sports. Each year, a number of organizations sponsor startup contests, where new companies are judged based on product quality, business plan formation, and more. Prizes vary, and sometimes include large cash awards or, perhaps more importantly, mentorship from established entrepreneurs. For example, The Startup Open, held each year, sends the winning contestant to the Global Entrepreneurship Congress, where top entrepreneurs and investors convene. Then, the winner gets a home, rent-free, for three months, and gets mentored by the founder of Redbox. It’s a jackpot for anyone looking to succeed in the startup world. Past winners include Teddy the Guardian, a teddy bear that measures children’s vital signs as they play.
3. Avoid Debt Entirely
Often companies take on debt to raise capital, but a lot of startups prefer not to go into debt early on. Fueled, an app development agency based in New York, is one such company. By aggregating a team through craigslist in order to cut costs, Fueled was able to produce high-quality work from the start. In-house learning was encouraged, and organic growth brought the company success. This sort of growth takes great leadership and solid business acumen, but is definitely attainable.
4. Peer-to-Peer Lending
This concept is similar to crowdsourcing, with a smaller ‘in’ group. An example would be a small business group, where members come together for mutual aid. Usually, peer investors have similar ideas, and thus will have a greater interest in the success of the startup. Sometimes, the investor group is comprised of businesses, but often, it’s a collection of individuals who like the product. Lara Miller, a fashion designer from Illinois, was able to get her brand going thanks to a small peer-to-peer funding loan. Since most startups only need several tens of thousands of dollars to get on their feet, this option is becoming increasingly popular.
5. Friends and Family
There’s no support network quite like a personal one. A loan from a close friend or family member will often be more of a blank check of support than a new cash source. Nevertheless many startups get their beginning because parents, siblings, or friends decide to invest before anyone else will. For example, Excite, a collection of sites ranging from news to shopping, started off with family funds. Sometimes, there’s no place like home when you’re learning how to walk for the first time.
When searching for alternative funding, just like applying for a loan, it’s important to have a business plan in mind at the outset. If investors can see where their money is going, they are more likely to put it down, and a well-thought out plan can clinch any deal.
How did you start your business? Let us know in the comments.
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