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How to Secure Financing for a High-Risk Startup

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You probably heard of success stories detailing how Silicon Valley outliers are able to establish multi-million dollar enterprises using only modest capital resources. The fact is, creating a startup has lesser complexities today compared to years ago when common business barriers made it difficult for young entrepreneurs to make their mark.

And even if we are afforded access to the fastest and smartest tools at the moment, these barriers still exist and are becoming a real problem along the lines of product and service innovation, especially in high-risk industries such as tech support and electronics.

Funding remains a critical phase in the life cycle of a startup. Obtaining the needed capital requires more than just saving up for the future. Let’s take a look at a few important strategies for financing a high-risk startup.

Unconventional tactics

New ideas are introduced to the market every day, but it takes the right amount of resources to bring them into the realm of reality. Young entrepreneurs that have yet to acquire enough business experience often resort to creative ways of financing their businesses.

One strategy is to access cash by putting up your car title as collateral. This is nothing new, but if you need quick cash for a potentially lucrative business in states like California or Montana, then you might consider getting title loans in Bakersfield or San Francisco.

Set up a crowdfunding campaign

The online world is a loose community which responds almost unanimously towards ideas and innovations that have value in the long term. With platforms such as Kickstarter and Patreon, businesses with impressive products to sell can generate funding directly from interested donors.

Recently, crowdfunding campaigns have become a viable option for young entrepreneurs who want to get started on putting their ideas into motion despite lacking the needed capital. They only have to create effective pitches in order to start attracting people who might contribute to long-term growth.

Angel investors and VCs

Venture capitalists and angel investors can contribute some of their equity to fund your startup. In a way, asking for money from these entities is considered an earlier form of crowdfunding.

The only difference here is that you need to put your best foot forward in promoting your product or service as a valuable offering in your market. There’s a lot to consider when pitching to angel investors and VCs, and sometimes it carries the risk of not giving your ideas the attention they deserve.

Consider a high-risk merchant account provider

Not all loan applications by business startups get approved by lenders. Stricter compliance coupled with a need for more regulations are playing against the owners of high-risk businesses. For this, it’s often best to turn to alternative funding schemes.

Access to business funding from a high-risk merchant account provider offers greater leverage for startups that are unable to get the capital they need to get things going. Interest rates are reasonable and payment terms are favorable to the needs of a growing business. If you need more help in accessing resources for establishing your startup, you can talk with EMB today and explore opportunities for funding your startup.

Funding shouldn’t be a problem for a lot of young entrepreneurs. They only have to focus on the right strategies in order to get started.

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Victoria Briano

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