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Business Letter

Ways of Raising Capital to Implement That Business Idea

The best way of making sure your business succeeds is by starting small, hence the adage, “Never despise humble beginnings.” Be willing to see your business grow rather that going big and failing. But even with a small business, you will need capital to implement that business idea. The challenge encountered by most entrepreneurs is raising capital to establish a business.
If you have a business idea that you need to implement, you can come up with a long term goal where you can start saving early towards that project. The problem with most people is that they are not patient while others do no have goals in the first place.
Incase you are among the people who cannot wait for that long, you can opt to approach your friends or relatives to help you come up with capital. Since some will require you to pay them back, you will need to have a good plan on how to repay your debts and avoid straining your relationships with close friends or relatives.
Your assets can also act as collateral where you can approach the bank for a loan. This is also an option that you need to consider carefully so as not to default in payments incase the business takes long to give you profits or fails.
It is always advisable to join investment groups where you can be contributing on monthly bases. These kinds of institutions usually help their members get funds to implement their business ideas.
Finally, do not pay all your debt when you start recording profits, rather approach your creditors and negotiate on how you can stagger the payments.

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Starting A Business

How to Raise Entrepreneurial Capital

There are several avenues that are available to entrepreneurs when it comes to funding for their business ideas. The nature of the startup would usually depend on where and who an entrepreneur can go to for funding even though there are some ideas that would be welcome in any platform. Below are a few that can be used to get funding for your next big business idea.
Savings: If you already have savings, or money put aside somewhere, this is the advisable method of funding your entrepreneurial startup. This is because money that you work hard to put into a savings fund is not subject to any strings and conditions, except those you choose to impose on yourself to help you focus and streamline your personal funding.
Angel Investors: Angel investors are usually individuals who invest in businesses for a lot of reasons. Mostly they are looking for healthy returns from the business while helping the new entrepreneurs get their business out of the ground at the same time. There is no definite amount that an entrepreneur can expect to receive from an angel investor as it depends a lot on the individual.
The Center for Venture Research at the University of New Hampshire said in a report that most ‘angels’ invest close to home. Therefore, if you are thinking of an angel investor for your business, look around your community or your state. This does not mean that there are no angels that invest further from home.
Venture Capitalist: This could either be an individual or a firm that provides what is known as venture capital. Venture capital is money which is used to fund a new business. This money is provided by an outside investor (much like an angel investor) and could also be used for troubled businesses. The money is usually provided in exchange for an equity stake in the business so it is not a loan.
Microfinance: More entrepreneurs are turning to microfinance as a means of funding their business startups. Although there are banks that offer microfinance, you are more likely to get funding for your business from a financial institution that focuses on microfinance. There are also a number of nonprofit microfinance institutions that specialize in lending to entrepreneurs.
Government: The government has a lot of loan schemes for small and medium businesses and as an entrepreneur, you might be able to benefit from these programs. However, most government loans are restricted to a particular sector, depending on the government.
Crowdsourcing: This has become a lot more prominent in recent times because of the many Dot com businesses that have benefited from crowd-sourced funding. There are several websites such as , , and , which focus on helping entrepreneurs to raise funds.
These are just a few sources that you can utilize as an entrepreneur to fund your business ideas. The most recommended though is either to bootstrap or to get loans from family and friends. Failing that, the options above should help.