There is a diverse range of options when it comes to startup funding
If you have a convincing startup concept, you will be able to select a range of different supporters to finance your startup. In most cases, a professional business plan that is neither too short, nor too long will help you attract potential investors to invest in your company.
The type of financing needed before, during, and after the foundation of your startup can often be very different to financing a typical regular company. When it comes to startups, many investors are not looking for dividends or interest, but rather to acquire company shares with their subsidy. Startup financers such as angel investors or venture capital firms often view investing in a startup as a risk capital investment, which will be worthwhile through sustained profit distribution or through the profitable sale of shares.
Selling company shares allows you to act immediately with greater financial force. You will also benefit from advisory contributions of external sponsors if you do not have any relevant experience in financing and founding a company, and your shareholders support you. This can be done through other avenues aside from advisory functions, such as assistance in business operations. In return, however, many investors require a certain amount of say in the direction and operation of the company, which means that you may lose part of your decision-making freedom.
For founders who have sufficient capital and/or a business model that can be quickly monetized, bootstrapping is also an option. Using this approach, you try to build up your startup carefully without having to rely on external investors for equity. However, unlike when working with shareholders, you alone are liable for the financial risk. Due to fewer financial resources, the company will not be able to grow as fast. However, you do retain 100% control over your business.
Those who do not have the necessary funding for their startup do not necessarily have to sell all their shares to make money. You can also try to secure loans, state startup funding, or funding through the crowd. The financing and development of a startup depends on many factors. As long as you have a promising business idea and a convincing means to secure suitable funding and capital providers, you will have a range of options to finance your startup.