Many people have had great ideas for businesses, but it’s not always easy to convince other people to fund them. Paul Saunders of James River Capital knows exactly how it is, and he wanted to let budding entrepreneurs know how they can find funding for their business ventures. If you follow his advice, you will make your entrepreneurial dreams come true in no time at all.
The first method is “bootstrapping,” and this is when you use the money in your savings accounts and your credit cards. You can also ask your family and friends for loans. This is the best thing that you could do because it doesn’t require that you offer other people shares in your company. In addition to that, it will be easier to convince your friends and family members to contribute money to your cause if you are the first to do so.
In turn, friends and family make it easier for strangers to invest in your business because if the friends and family members of an entrepreneur don’t believe in him or her, other people wonder why they should. Learn more: https://www.cbinsights.com/investor/james-river-capital
The second option is crowdfunding. With crowdfunding, a large group of people pledges money to support an idea in which they believe. This option is great for an entrepreneur who is starting out with nothing because the investors do not expect you to pay them back.
Paul Saunders also advises that you look into the more conventional forms of funding a business. The Small Business Administration is one option, but banks provide people with business loans as well. You can get a bank loan with a lower interest rate than an SBA loan, but a bank loan is harder to get.
The Angel Capital Association helps you find angel investors. Angel investors are willing to invest as much as $10,000 in a great idea.
Venture capitalists find financial vehicles for their clients’ money, and they choose investments for them that appear as if they will make the investors money in a short period of time. Specifically, these investors are expecting you to offer them three to 10 times their initial investment, and they expect to receive it in five to seven years.
The last option that Paul Saunders suggests entrepreneurs do is trade equity in your future company in exchange for the money that you need to get the business started. You might like this option because it doesn’t cause you to take out loans and start out with debt. Also, without any loans to repay, you won’t need to turn a profit so quickly.
James River Capital became an independent investment firm in 1995 when Paul Saunders combined forces with Kevin Brandt and founded the firm.