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In this article, we take a look at four useful ways of funding your startup. And you won’t have to make any sacrifices with the methods we discuss below.
Getting Your Startup Off the Ground
Finding an interesting business idea is a daunting process. You might spend months or even years to find that one idea you really believe in. First, you identify the industry you’d like to work in. Then you conduct intensive market research to find out of your idea will attract customers. Finally, you talk with friends and colleagues who might be able to help you with pursuing your goals.
Probably, you encounter your own fears of failure and even of success. This is normal. You know you’re going to have to work hard. People often feel afraid at the idea of starting a business. Take heart from knowing that once you find the courage to dive in, your focus will shift from your fear to making your business a success.
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However, there is another thing that can become a hurdle for you. That’s the lack of money. Some people have enough money in their savings account to fulfill their start-up dream. On the other hand, many entrepreneurs don’t have enough money to pursue their goals. Fortunately, there are several ways of funding your startup.
In this article, we take a look at four useful ways for funding your startup. And you won’t have to make any sacrifices if you use the methods we discuss below.
Crowdfunding Your Startup
Creative entrepreneurs have looked to crowdfunding as a valuable option for funding startups years. These individuals don’t waste their time trying to find angel investors who will invest hundreds of thousands of dollars into their ventures.
Instead, they raise money through smaller contributions from hundreds of people. Crowdfunding could be the ideal solution for you, too.
One of the main advantages of crowdfunding is that it can help you to market your product long before you officially launch it. For example, you can analyze the feedback you get from your crowdfunding investors. This can help you to determine if your idea will work in the marketplace or not. Indiegogo and Kickstarter are two popular crowdfunding websites where you can raise funds for your startup business.
But first, you need to understand the terms and conditions of these websites before sharing your idea. For example, Kickstarter only accepts ideas from individuals who are from certain countries. Unfortunately, residents of Singapore are excluded from using Kickstarter. On the other hand, Singapore residents can accept help from a business partner who lives in a country that Kickstarter does not exclude.
If that’s not an option, getting a grant can be a great way of funding your business in Singapore. The Singapore government makes efforts to encourage small businesses that are show promise of bringing change to their industries.
First-time entrepreneurs can apply for the Spring Singapore ACE grant. For every S$3 the entrepreneur raises, Spring Singapore will match S$7, up to S$50,000. In other words, if you were to raise S$21,429, you would receive the maximum grant of S$50,000.
Spring Singapore will give the grant over two to three tranches. Moreover, they won’t take equity in your organization. However, an even more beneficial benefit of this method of funding your startup is that it helps you to find a suitable mentor for your startup in the first year.
Depending on your sector or industry, you can add on several other local grants that are especially designed for startups. For example, Spring Singapore offers clean and high-tech companies additional funding schemes. Alternatively, social enterprises can take advantage of the ComCare Enterprise Fund.
One or more of these grants can give your startup a great financial boost. Therefore, do some research to find detailed information about grants available in Singapore.
Incubators and Accelerators
You’ll be more likely to obtain seed funding if you can get your startup into a business incubator or accelerator. There is a difference between the two. For instance, they are both for organizations that are just starting out. However, an accelerator requires that you work with a mentor for a set period before you can graduate.
Unfortunately, there are only a few seed funding programs available nowadays. However, you can get targeted resources and support for your startup by joining an incubator or an accelerator.
This is because your chances of succeeding with your startup business are much better when you give yourself opportunities to work with successful entrepreneurs. Tech companies in particular can benefit from working with accelerators and incubators in Singapore.
If your friends and family members can’t help to fund your startup, you could turn to a bank or licensed money lenders to get a loan. With a loan you can retain full control over your company because you wont have to turn over any equity to investors.
To give one example, OCBC has designed a collateral-free loan program for startups. The loan, known as the OCBC Business First Loan, provides an entrepreneur with access to $100,000. To qualify, you need to have started your business within the last six months or so. However, you must have a guarantor. If you are a beginning entrepreneur with an untested business model, be very careful about taking this loan.
Similarly, think carefully before taking any loan if you don’t expect to begin bringing in revenue in the short or medium term.
Another useful option for funding your startup, however, is taking a personal loan. Some banks such as Standard Chartered CashOne offer a low minimum income requirement with attractive interest rates. Similarly, the ANZ MoneyLine Term Loan offers interest rates as low as 6.6% per year.
Entrepreneurs in Singapore can now fulfill their startup dreams with the help of these funding possibilities. To find out more, conduct some research and find the funding choice that works best for you. We recommend choosing an option that comes with lower risks so you will be better able to focus on growing your business.