MIS4596 CAPSTONE COURSE

4 Tips For Finding Funding For Your Startup

 

Forbes released an article discussing possible ways to fund startups.  Having a great idea and product is only half the battle when launching a startup.  You are going to need cash and a lot of it.  Fortunately, in today’s day and age there are new alternatives to achieve funding.  The article provided a few ways that may help you find the best route to go when starting your business.

1. Consider your niche – What makes your app special or stand out?  Find this attribute and use it to locate investors that may be more inclined to investing in your product.

2. Find a grant – This may be difficult, but this will be a great way to get things rolling.  There are grants for tons of different things, almost similar to the way scholarships are rewarded.  There are grants for minorities, women, mothers, etc.  This may be a difficult option, but it is definitely one that will provide great benefit.

3. Enter a contest – There are many contests now held to provide money for startup funding. If you chose to attempt this method you should focus on making your idea really stand out and being very clear when explaining your product/service.

4. Crowdfund your idea – These platforms are gaining attention from both businesses and investors.  This has become increasingly popular in the past couple of years.  Some of the popular sites include Kickstarter and Indiegogo.

4 Tips For Finding For Your Startup

Which tip do you think is the most helpful? Also, I am curious to everyone’s thought on crowdfunding.  What is your stance on it?

 

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4 Responses to 4 Tips For Finding Funding For Your Startup

  • Profile photo of John B Illuminati

    Of the four tips, I think that finding your niche is definitely the most important. Without having a niche, then none of the other three funding tips in the article would be possible. Additionally, having any niche is not sufficient enough to expect to get funded. Rather, your niche needs to be valuable enough for people to want to fund it. An example that comes to mind is from the bloated music streaming market. Right now, there is a lot buzz about the latest streaming service, Tidal. They’re just like any other streaming service except that, um, it’s a luxury streaming service? It’s backed by musicians (*note: wealthy musicians), therefore it is a paid streaming service. Tidal definitely has its niche, but it will no doubt fail, because the niche is not seen as valuable enough to pay a subscription fee for, especially when music can be easily acquired for free.

    As for crowdfunding, that is certainly an interesting method of funding nowadays, and continues to grow in popularity. It is an excellent funding option for startups that already have a bit of a following. However, what is not often mentioned is that a majority of crowdfunding campaigns fail to be fully funded. According to Kickstarter’s own statistics, only 38% of campaigns actually reach their funding goal. To put it in a different perspective, nearly 2/3 of crowdfunding campaigns fail. This ties back to the need to have a niche. If a startup does not have a convincing and valuable niche, then there will be little interest in having their idea to be funded. If they do have a convincing niche, however, then crowdfunding will be an excellent way to get funded.

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  • Profile photo of Jacklin Altman

    I agree with John that finding your niche is the most important. The startup is fundamentally built around it’s unique offering, and without a real value proposition, funding is irrelevant. As far as crowdfunding goes, I think it’s awesome. It’s a way for people to get behind something that they believe in and contribute to its success. However, with crowdfunding, you are subject to the masses, and even if an idea is good, it may not get funded because people may not understand it, or a bad idea may get funded because people like it.

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  • Profile photo of Anne E Buckley

    I really really enjoyed reading this article, considering it is my dream to one day be able to run my own company. I have a couple of ideas in mind, but I still need to determine whether or not it would be worth the investment. I think that finding my niche is most definitely the most import tip from Forbes, considering I would be devouring so much time to the business and if I was not passionate about it then how can expect my employees and customer to be passionate.

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  • I have to agree with everyone that the niche is very important but, I also think that if you use that approach you should also use a contest approach as well. If your idea is good enough to sway a lender to invest in your product, it should be well-thought out enough to win a contest.
    Crowd sourcing is such an interesting trend emerging today, but if someone is willing to give you money so you can accomplish your dreams, would you not take it? I would. A friend used a GoFundMe to raise money so she could create her own comedy sketches to help her “make it” in LA. She raised more than her target goal and has produced two of four sketches already. I think this type of funding brings the community together; the thought of strangers helping strangers accomplish life goals is amazing in this day and age.

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