Want to raise funds for your new business? Take a look at the options

When I first started Circuit, there were a multitude of factors to consider. From who would be the first employees and when they should come on board, to making sure we built the product for the right customer and not just the existing user – to the big question: how to fund the business.

Without strong cash flow, a business will come to a halt, so it’s vital that every entrepreneur keep their nose to the ground and seriously consider the available options. There is no one right way of doing things. Each funding method comes with its pros and cons.

My co–founder Pol and I started the business with our savings and we have bootstrapped to $10M in ARR! It has been a fascinating and rewarding journey so far.

Here are five ways you can inject cash into your business and take it to the next level.

A newer, less traditional way of gaining capital, crowdfunding has become one of the most popular methods for new entrepreneurs with great ideas. From GoFundMe to Kickstarter, various platforms allow the public to donate money to a range of causes.

Crowdfunding is a great way to gain public traction, with investors from various sectors having access to your new company. One of its biggest perks is that it is less complex to manage than other forms of funding such as angel investment or venture capital if successful.

Crowdfunding platforms can be very competitive in raising money, and you have to grab the attention, imagination and cash off your potential investors. Businesses should also be aware that crowdfunding sites often require a percentage of all raised funds as a fee for using their platform.

Usually sponsored by universities or private companies, business incubators / accelerators help new businesses start and scale with the right foundations. With Circuit, when we began to develop and launch our B2B Circuit for Teams product, we went to Techstars – an accelerator – to help us conquer a new market.

Incubators focus on helping drive businesses growth – they will nurture businesses and watch their progression closely.

Incubators create fantastic networking opportunities for both the businesses and their founders. This can include organizing events to help companies in their cohorts meet new potential investors, partners and prospects. As part of the funding process, most accelerators will take a percentage of your business at a low and non-negotiable valuation compared to other methods – businesses should keep this in mind if considering this method.

Venture capital (VC) is where startups receive funds from a private investment company or venture capital fund, which gathers money from various avenues within their network.

VC’s often have valuable potential contacts, partners, prospects and other investors for your business. This is essentially part of the reason for their growing popularity – they bring more to the table than just money.

Unfortunately, many businesses seeking VC funding will not be successful – it can be a long journey to raise venture capital. Venture capitalists will expect to see a return on their investment. It is because of this that they monitor business progression closely. Owners should prepare their businesses to give up some control to these investors when it comes to decision making.

Bootstrapping relies on a startup having some initial funds to start and using a business model that can quickly return capital. While it may not be appropriate for companies in highly competitive sectors, it’s an ideal solution for SaaS businesses. It instantly demonstrates what’s working and allows for sustainable scaling.

Bootstrapping also allows for a more straightforward ownership structure as there are no, or fewer, investors involved. This means founders retain more control over the direction and destiny of the business.

The price of this is that bootstrapping will require some sacrifices from its founders. Some savings or funds will be needed to start or to plug the gap if the business doesn’t hit its initial revenue and profit projections.

Angel investors offer funding for new businesses or startups, usually in exchange for part-ownership or as a loan. Some also offer mentorship to guide entrepreneurs through their journey.

As a person is being offered capital, they can be more engaged in the business and offer practical support to help it grow. Several startups develop a strong relationship with investors who can then reinvest when capital is needed quickly – for example, to maximize advertising spend during peak periods.

Startups should be aware that angel investors usually offer less money than can typically be found through other methods, so founders may need to seek investment from a number of them. Startups should therefore give space for a higher level of investor management and communication.

Finding the funding you need is not a quick process, but it is a necessary step. Businesses must focus on what is best for them, and that will not always be the ‘easiest’ method, but the one which guarantees your business’s success and longevity.