What you need to know about startup funding

What you need to know about startup funding

Posted by Rudy Labordus in Marketing Strategies Leave a Comment

Before You Go After Startup Funding, Ask Yourself These Questions

At some point you're likely going to need startup funding for small business, and if you're like most of us, you haven't a clue as to the sort of questions you'll need answers to, both for your business and for your potential investors.

Potential investors will want to know your answers also, and rather than head into the process unprepared, let's take a step to make you more prepared by listing at least some of the important questions you'll want to have answers for startup funding.

7 Questions that need answers for startup funding for small business

How much capital is needed? – Knowing in advance the amount of money you're looking for simplifies things immensely. Research what your costs are going to be, project that over your investment time period and add a buffer.

What will it cost you? – What are you willing to give for this money? Will it be shares of your company, and how much is that? 10%? 25%? This is something you need a firm grasp on, and at least initially not be swayed from.

When do you have to pay it back? – When will you be expected to repay this investment? Are the terms you'll be getting conducive to running your business at the same time? How much strain will this produce on the business?

What's your business growth strategy? – You and your investors should be quite interested in what your plan for growth is. Not only is the plan of importance, but also the time frame for growth.

What are you willing to risk? – Are you willing to put up equity (other than sweat equity) in your startup? This can sometimes make it easier for others to see their way clear to invest.

How much input do you want? – Making it clear from the beginning how much outside input is wanted is a good idea.

Who buys and uses your product or service? – Who is the ideal customer, and how do you plan to market to them? Having a firm grip on your eventual buyers calms many investment fears!

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