Student start-ups: 4 simple ways to raise capital
So, you’ve had that eureka moment and decided to start a business. You’re sure it’s the best thing ever, but you’ll need convince a few other people. Rich ones. You might have already planned out how you’ll spend your millions but unfortunately things rarely run this smoothly and many start-ups fall at the first hurdle.
Running a start-up as a student requires commitment and hard work and getting the capital (money) to test the market and make prototypes is just the first of many challenges you’ll face.
This doesn’t mean you should give up now though; we’ve come up with four suggestions to help get things started.
4 ways to raise capital
Start-up Loan Scheme
Probably the fastest and simplest way to raise seed capital is through the government backed start-up loans scheme.
Aimed specifically at young entrepreneurs, and backed by none other than James Caan, the scheme allows you to apply for up to £10,000 which you pay back at a very low rate of interest.
If you have a great idea and show that you are ready to commit enough time to make it work you’ll be likely to get a positive response and some funding.
You’ll also be given a mentor and access to free business startup services. Remember, a solid business plan will be essential to success here.
A recent internet development has been the ability to crowd source funding for ideas and projects. The concept is simple, you upload your idea and, hopefully, hundreds of people from across the web think it’s a great idea and invest.
The potential to raise capital here is huge, but you might be better off looking to raise a smaller amount of seed capital and giving away a bit more equity, since the risk for potential investors is high.
Having a solid profile on these websites for your business is crucial, after all this is all that your potential investors will be judging your business on!
Also, try to get some sort of market research and a basic website up and running, this demonstrates to investors that you’re serious and are already getting going with the project.
Friends and family
The idea here is similar to crowd funding but closer to home. Why not ask your parents for a small loan or an investment to help get you on your way? If that’s not an option, why not ask friends at university who may have some cash to spare?
Find enough friends who are willing to do this and you’ll soon find yourself with enough capital to launch the idea and get things going.
Plus, with your friends and some family having a small stake, they’ll naturally promote the business through word of mouth and offer feedback. Perfect.
Don’t raise any capital
Alright, we know this sounds bizarre but bear with us on this one. Starting a business is hard work whichever way you go about it and it may pay off to just learn the skills you’re lacking to start-up yourself.
Whether that means partnering up with someone who has the skills you don’t or learning how to do it yourself, university is great place to try and get what you need without splashing the cash.
After all, Save the Student has never asked for a penny and look where it is now 🙂
Finally don’t let the size of your project stop you from getting going. Determination is the key and by mixing and matching these methods you’ll find a solution to turn your idea into reality.
Have you decided to set up a business during your time at university? Make sure to let us know how your idea is going and how you managed to get started!
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