Raising capital for a startup in 2022: What you need to know

The business world is undergoing a period of change, with more people looking to turn their side hustle into a full-fledged startup.

And many do succeed, especially if their product and services ideas are geared towards the technological niche. 

However, for every successful startup, there are 10+ others that don’t have the same happy ending. This may be due to the inexperience of the founder(s) but a recent study showed that cash flow problems led to the demise of 82% of startups

Trethowans
Trethowans

Therefore, if you can keep the money moving, you have a better chance at climbing the stairs to success. Still, this requires the existence of capital that can be invested into all sorts of necessary business expenses.

In this article, we are going to mention some of the most common funding solutions for startups looking for flexibility and modern tools.

1) Choose flexible funding solutions

Banks and investors are usually the first two options that come to mind when you’re looking for capital for your startup. However, the first one is restrictive and inflexible, while the second one has you give up part of ownership. 

That’s why, before deciding on the first funding solution that comes your way, you should do some research. There are some interesting options on the market, and many are truly flexible looking to create a win-win scenario for all the parties involved.

For instance, you could choose to pay with extend, which is an expense financing solution for recurring revenue companies that scales at your pace. The solution can integrate with most popular banks and accounting services and helps distribute expenses while maintaining a smooth cash flow for the business. 

That’s why, with such a solution, you can take on bigger expenses without worrying you’ll run out of money for salaries and other necessities. 

2) Look for small business grants

The best part about money coming through grants is that there are fewer strings attached. Plus, you don’t have to pay it back with interest and you don’t have to surrender part of your company as happens with venture capitalists. 

However, business grants for startups are not that easy to find, especially if you are in a tighter niche. Still, if you can afford to wait and you know where to search for them, chances are you will find at least one or two grants that fit your needs. 

Quick tip: stay up to date with the latest news in your niche and always look for networking opportunities. You never know which connection may bring you the big lottery ticket you’ve been searching for!

3) Venture studios

A venture studio model is an innovative approach to entrepreneurship that combines company formation with venture capital funding in order to reduce time to market, iterate quickly, and scale more quickly. 

If you’d like to invest in or get involved with a venture studio, make sure you find one that fits your specific industry, your investment credo, or your expectations for veteran entrepreneurs and founders.

Accelerators to AI venture studio for B2B SaaS companies assist marketers to develop the idea behind a company or product whilst concurrently making an investment capital and imparting strategic direction.

4) Crowdfunding

Crowdfunding is not the best solution when you’re looking for large sums of money, but it can provide you with the seeds to start. Plus, it’s a fantastic way to get a brand out into the world and let anyone interested know you are in search of capital. 

While most campaigns fall short (only 23.5% of campaigns end fully funded), the practice is popular enough to support over 600 crowdfunding platforms. So don’t get discouraged – you never know who may see your idea on such a platform and reach out. Still, in the long term, you will have to think about a more reliable financing solution. 

Small business have more funding options than ever

In conclusion, small businesses have more funding options now than ever. So as long as you stay up to date and do your research, you will find the ones that work best for your business. Still, make sure to work with a plan in mind to make sure you select an option that helps you develop and grow your business vision.

Photo by Luke Southern