Published on August 15th, 2013 | by Jose Vasquez1
3 Unconventional Ways to Raise Money for Startup Tech Companies
If you’re searching for ways to fund your business, these three novel options present a great alternative to the same old suggestions.
As a new entrepreneur, you’re probably desperate for investment capital and bogged down with the same old suggestions on how to raise it. You’re familiar with pursuing angel investors. You know the risks of taking out a huge loan. You’re aware of crowdfunding and have read up on the basics.
But there are alternative methods of raising money for your business that don’t often occur to people because of their unconventional nature. They’re not always the most efficient or most rewarding methods, but they do tend to be successful and result in at least a portion of the investment capital you’ll need to get going.
Marla Tabaka, a small business advisor and writer for Inc.com, put a spotlight on three unconventional ways to raise money for your business in a recent article she wrote. Here, I take a look at these three potential ways to raise money and evaluate their efficacy for startup tech companies.
- Contests. Contests and competitions are difficult to find, but when they pay off they tend to pay off big. Many contests, depending on where you live, offer anything from cash to free office space to winners of local startup business competitions.
- Purchase Order Financing. Purchase order finance companies exist to help businesses in need of cash secure fulfillment from other vendors and distributors. It’s only an option if you plan on working with outside vendors, but can be very beneficial if you’ll be in need of some recurring cash or a line of credit.
- Rolling an Investment Vehicle. If you have a 401k, you may be able to roll it over into your business without any tax penalties. Just be sure to consult your financial advisor to avoid any unpleasantness before it occurs.
If you can avoid rolling an investment vehicle, you probably should, and purchase order financing is only applicable to some types of startup tech companies, but never underestimate the possible contributions a contest or competition can make. Get involved in your community as much as possible to reap the greatest rewards.
Read the original article here.