Do you have an idea for a business but need money to get it off the ground?
Where should you start? That depends on how far along, or mature, your business is, says Evan Burfield, a tech entrepreneur and co-founder of startup incubator 1776.
If you are still in the idea phase, Burfield explains, approach family and friends with whom you have a trusted relationship. Once you have a product and evidence that customers will use it, you can look for seed investors. Finally, when you have a mature product and have demonstrated that you can grow a business quickly, venture capital firms are an option.
Burfield’s advice is not just relevant to traditional businesses. It can help social enterprises too.
Reach investors outside your city or country using the Internet — try a crowdfunding campaign.
Take the next step
Raising capital requires preparation, so give yourself a head start.
- Seek out an investor in your community before you make a formal pitch. Ask his or her advice on your business model.
- Research various ways to raise capital for your business, including crowdfunding.
“Want to know more?”
During a State Department webchat, Burfield shared more business insights. Hear his thoughts on what skills it takes to start a business; why not defining your customer “is one of the most dangerous things you can do;” and other topics for aspiring entrepreneurs.