You may have an earth-shattering innovation, but you need money to give it wings. It used to be that starting or expanding a business required dipping into your savings account, obtaining a loan from a financial institution, or borrowing money from family or friends. These options have their limitations, however. Clearing out your savings account can be scary, banks may or may not grant you a loan (and may charge heavy interest if they do), and using loved ones’ money can strain relationships.
Fortunately, technology has opened up new ways to raise capital for businesses. It has leveled the playing field for aspiring entrepreneurs of all income levels.
Blockchain is a digital ledger where transactions made in cryptocurrency (such as bitcoin) are recorded chronologically and publicly. Many startups turn to Blockchain for the initial coin offering or as a way of raising money without giving up equity to donors. A startup entrepreneur can create a credible ledger and use bitcoin as currency.
This popular new process helps you raise capital for your venture by obtaining a small amount of money from many different people. Small contributions from the masses add up. It does not take much effort to find donors when you work through crowd funding sites, but be prepared for people to ask for prototypes of your product or a percentage of your profits in exchange for funding your startup.
Networking can help you connect with the right people to assist you in that effort. You can generate leads through your existing social networks to find the people who are best suited contribute to your coffers.
To start a business, you need money, and money comes from people. Technology doesn’t solve every problem, but it is invaluable in helping innovators connect with investors and secure startup funds that might otherwise be hard to come by.