You may have caught my last “accidental entrepreneur” post where I shared advice on how to connect with the right coder and actually get your idea built and out to market. Since writing that, my co-founders and I have found a coder (horray!) and now all we need is that silly little green thing that makes the world go round…
Oh Right, Money.
Here’s an obvious statement: Startups need money. Money for programming costs, money for marketing, and money for little things like LLCs and premium Skype subscriptions so you can video chat with your co-founders in different cities and countries. Things of that nature.
Sit down, budget your startup costs and multiply it by 5. That’s probably a more accurate reflection of what to expect to shell out. And, this is only to get your startup off the ground. Ay caramba!
So, my bootstrapped friend, how are you going to find the funds?
Going through this app-building process, I’ve discovered several ways of scraping up startup cash. Selling your soul is pretty lucrative. Also, having an ebay party whereupon you sell everything in your mom’s house to bring in some serious dough works too.
I’m kidding, of course. A more realistic approach to gathering the funds is what I like to call “The Three Cs Approach.”
The first place you should start looking for startup money is within your closest circles. That means Mom, Dad and rich Uncle Jerry should be getting an email, call or personal message from you about your exciting new project. Asking anyone for money is always uncomfortable, but remember, these are the people that are emotionally invested in you and want you to succeed. I promise they’ll be happy to help, even if it’s just 10 bucks (hey, that’s a couple of long-day-building-your-startup beers!).
Since the JOBS Act was passed last year, crowdfunding has been a hugely popular fundraising platform for startups. It’s a way to cut out the awkwardness of asking your circles to give you cash. There are loads of crowdfunding platforms out there. I recommend the following:
Indiegogo – This is the platform our team is currently using to raise the final startup costs. And yes, this is where I plug our awesome campaign and tell you to donate and share with your friends! Indiegogo tends to be a platform for artsy projects, but the selling point for us is that you receive any money donated despite reaching your goal, the difference is the cut indiegogo takes at the end of the campaign. Find out more here.
Kickstarter – Easily the most popular of the crowdfunding bunch. Your project will be seen by tons of people, but a huge drawback is that if you don’t reach your goal, you don’t get any of the money raised. I don’t know about you but, if Aunt Sally wants to donate $100 to my startup, I want that $100!
I know they sound intimidating, but these are the cash cows that are looking for startups like yours to invest in. Obviously, it’s harder to secure funding from VCs as you can’t rock up saying, “Like, we totally have this awesome idea and, like, it’s going to be the next Facebook.” You have to be prepared to prove that your startup will make them money with solid business projections and proof that the market needs what you got. Here’s more tips on landing VC investments.
If you’re a cash-seeking startup, as I’m sure you are, it can be an extremely frustrating process. Trust me, I know. As an accidental entrepreneur with a freelance writing budget, I have to seriously hustle to get these development funds together. But once I do, this app is totally going to be bigger than Facebook. Like, totally.
Here’s to the next post being about how to manage all the cash your startup is making. Wouldn’t that be great?