Starting A New Business: The Best Options in Finding Capital

Written by: James Carnell

The pandemic has led to an unexpected startup growth all over the globe. According to data from the US Census Bureau, the third quarter of 2020 was the highest quarter of business applications that America had experienced.

Many businesses emerged in the pandemic by taking advantage of the fact that more people wanted to have the ability to shop for everything online, it is no wonder that the online retail industry grew immensely the past year. Another sector that benefits for a more web-based lifestyle has been the casino industry. While real life casino shut their doors in order to contain the spread of the virus, more online casino sites found their way in this crowded, yet remunerative business.

The boom could also be linked back to the increased funding measures taken by governments everywhere in order to support small business owners. With startups becoming an everyday reality, more and more entrepreneurs are looking for the best ways to find capital to expand and grow their business. Thus, if the business has potential finding capital is not difficult. There are several ways new businesses can go about finding capital, such as crowdfunding, friends & family investments, angel investments, and venture capital.

Here are 2 easy ways to find capital for a new business

1. Crowdfunding

Over the past few years crowdfunding has become more commonly accepted as a way to gain capital. For a long of small businesses it is easier to find capital through crowdfunding platforms as they do not require the same level of financial data that going to venture capitalists requires. Crowdfunding platforms are the best option for direct to consumer businesses, such as gaming sites or apparel companies. Crowdfunding websites are easy to find through simple Google search and some are even niche oriented, making it simpler for small business owners to find a targeted audience. Moreover, this form of capital can also be seen as a proof of concept for venture capitalists and formalized angel investors. Some big firms that took off on crowdfunding platforms are Popsocket, Pebble Wearable Devices, and Skybell Video Doorbell.

2. Government Grants

The pandemic allowed the government globally to recognize the importance of businesses running within the country. As there were shortages in food and many other products due to import/export restrictions, more countries took the lead to offer a multitude of loans and grants to support small businesses in order to promote entrepreneurship. It is easy to find these grants which can work as capital for small businesses simply by visiting the government websites and business bureau websites. These grants can be open to everyone or specifically for a targeted group of business owners to diversify entrepreneurship. Overall, they are a great way for business owners to find capital in early stages from a reputed source. Bellingham Bakery and Tacoma Security Company are examples of businesses that succeeded through government funding.

The pandemic is proof that businesses can take off in one’s home if it attracts the appropriate audience. Many businesses such as Clubhouse showcase that startups can find capital with a high valuation if they have a proof of concept. Small businesses just need to identify what kind of capital they need and show the validity of the business as well as its potential to succeed. Unlike a decade ago, anyone with a good idea and the ability to turn it profitable can become a business owner and gain capital.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes