ENTREPRENEURSHIP: 13 WAYS TO FINANCE YOUR BUSINESS WITHOUT A BANK LOAN - 3

Continued from part 2 

10. ANGEL INVESTOR: An angel investor often has business experience relevant to your business and is interested in adding value to your company, as well as making a return on his or her investment. While looking for a suitable investment, is also looking for a personal opportunity.  

The angel investors are usually rich and have personal interest to see the success of
the business, as such, they use both their fund and expertise to make sure the
business succeeds.
 11. VENTURE CAPITALISTS: It is a means of funding a new business or an already
existing business by which the financier becomes a part owner of the business for a
specific time.  It is either done by individuals or corporate bodies.

People or bodies that fund businesses in such manner are called Venture Capitalists. When they invest in a business venture, they become part owners for a period, receiving returns and finally gets paid off at the end of the stipulated period. Unlike the Angel investors, Venture capitalists  do not necessarily involve themselves in running the business.

How To Find Business Angels & Venture Capitalists: 

a. Network with people: Hang around the ‘Big Boys’ with wisdom and tell them about your business idea. Over time, they’ll link you up with Business Angels and Venture capitalists.

b. Ask for Referral: People feel more comfortable financing businesses recommended by those they trust. 

c. Do a focused search: There are some retired executives around you that will be glad to finance your business, only if you can present your ideas appropriately.
They have the money and experience to fund and mentor you. Some are even looking
for good business ideas to finance.

12. PRIVATE PLACEMENT:  This has to do with you selling part of your business in a bid to raise fund. Here, the business is broken down to units for easy purchase.

A limited liability company is formed at the end of the day. The individual with the highest number of shares becomes the Chairman of the company.

Caution: In doing this, you need a good legal adviser. Also, try as much as you can to avoid giving out up to half of the share capital. 

13. INITIAL PUBLIC OFFER (IPO):  Initial public offer (IPO) is a means of raising money from the general public through the stock market to expand an already existing business with a good financial record.
For a business to qualify on this platform it must have;
a. A good financial record for a certain number of years
b. It must have a sound management team
c. It must have done business for a certain number of years and many, many more.
More on this can be explained by stock market regulatory body. 
Bonus:
14.  GOVERNMENT AND NGO’s
Government has several programs to assist people up the ladder; at local, state and
federal levels. Look out for the latest program you can benefit from.  Examples of
government’s past programs in Nigeria are YOUWIN and  NAPEP,

Non-Governmental Organizations (NGO’s) are set up to assist people to live better lives.  In order to assist people live better lives, funds are channeled through them by individuals, corporate bodies, government, religious bodies, etc.

Get a list of the NGO’s around you and approach them.

15. CROWD FUNDING: This method works better in developed countries. Here, an idea is being funded by as many people as, in bits, with the assurance of getting returns for their investment.  It is a very rare method in developing countries. 

16.  GET A MENTOR
You may think you can do it yourself. You need someone who can take you by the hand and lead you through your business. Someone who has gone through what you are going through. With him/her by you, raising the finances to start-up or expand your business will not be much of a problem; he/she will counsel and direct you.

Your mentor should be someone more experienced in life and business.
He or she can be in another city, state or country. You can have more than one mentor.

As a beginner, don’t only have distant mentors; it is very necessary to have mentors you can see often and relate with.

CONCLUSION:
Try these I6 ways one at a time and you’ll definitely get a positive result.  You can also try other ways not listed here, do not go for a bank loan, especially as a startup.  The reason is: it is risky to learn the nitty-gritty of a business with a bank long. As a startup, you are yet to know the practical aspect of the business.

There are Bank and Non-Bank lending institutions which will not be discussed at the moment; they the very last options you should consider.

Bank loan is for short term with stringent conditions. People make the mistake of using short term loan to fund a long term business. Be wise!




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