Very often when starting a new business, you may need some cash. Very often you do not have a rich father or wealthy uncle. You sometimes cannot even borrow enough cash from a bank loan as you do not yet own many assets (according to the banks). Borrowing from one of the angel investors is always an option. Angel investors are simply well-off individuals who like to invest in startup ventures, often in exchange for an equity stake in the new startup business. Usually this is what happened to a typical angel investor. The angel investor would have already been successful in a particular industry. Now the angel investor is looking for a new opportunity in the same industry.
These are some of the names of angel investors who you can borrow cash for starting your new business: AngelList, Go4Funding, MicroVentures, Tech Coast Angels, Golden Seeds LLC, Hyde Park Angels, Investors Circle, Band of Angels, Alliance of Angels, Angel Capital Association, and more. Most of the above angel investors may offer financing to get your business off the ground. And some are even willing to provide guidance based on their own experience (in the same industry). This is a big help, as they have been through experimenting the same path that you are now heading into. This is going to save you from making a few obvious and unnecessary mistakes. Also, they would let you leverage from their existing contacts in the same industry which will open many doors for you to grow your business. The downside is that it may take you sometimes quite awhile to meet the right angel investor.
You may well be one of those startup owners in Taiwan, Singapore, or Hong Kong. If your plan is to locate your business in Hong Kong and your new business is highly related to technology, you may consider getting start-up funds from Cyberport Incubation programme.
In some cases, the startup entrepreneur himself may be self sufficient. When you prefer one of the options of self-funding, they are:
- Use personal savings (that were accumulated for many years).
- Take the cash in advanced from your several credit cards.
- Borrow the money from your bank by loaning your house to the bank (if you already have property, such as a house or an apartment).
- Similar, but this time you take a bank loan directly. The difference is that you aren’t using your house when borrowing this cash from the bank. The bank would usually grant you a small amount.
- Can you cash out from one of your previously invested accounts such as a retirement fund account, etc?
The last option is to borrow the upfront cash from one of your friends, or one of your family/relative members. Depends on the agreement with the person you’re to borrow from, usually you will eventually only have to return the cash without interest.