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How to get start-up funding: Tips to launch your tech start-up ASAP

Want to launch your own tech start-up like Bitcoin Loophole? Here are the top tips to get start-up funding ASAP!

Johannesburg, 03 May 2024
Angel money is more plentiful and accessible than most options.
Angel money is more plentiful and accessible than most options.

You've got the million-rand app idea. The business plan is bulletproof. Your tech team is somehow even smarter than Einstein! There's just one teeny-tiny problem standing between you and creating the next Instagram/Uber/Bitcoin – money.

Without enough cold, hard cash to execute that flawless vision, your dream start-up will remain stuck in your mind's thought bubbles forever. And we can't have that, can we?

Lucky for you, this guide contains all the tips and tricks for scoring the big start-up money needed to follow in their footsteps!

Tap into your savings (and your friends' too)

Let's start with the obvious – your own personal savings! Even the leanest launching pad of say R10 000 can go remarkably far for things like incorporating paperwork, building an MVP app or website, initial marketing experiments, etc.

But beyond just draining your bank accounts, don't be afraid to hit up any close friends or family still supporting your start-up dream too. Having loved ones financially invested, even with just a few thousand bucks each, can motivate you more while letting them share in the upside if things pop off.

Seek angel investors

Once your personal cash taps are drained, or if the start-up budget needs are understandably larger from the start, it's time to start pitching to wealthy angel investors. These are usually retired entrepreneurs or executives looking for promising opportunities to invest their millions.

Don't be fooled – persuading angels isn't easy. The vast majority will reject your pitch quicker than you can say "unicorn". But angel money is still more plentiful and accessible than most options. Just make sure your deck absolutely slays with concrete financials, a revolutionary value proposition and undeniable evidence of your domain expertise.

Consider crowdfunding

Can't seem to woo enough angels into placing bigger bets? Then it might be time to take your fundraising mission directly to the people – the worldwide masses of smaller investors who will open their wallets for the right opportunity!

Welcome to the world of crowdfunding platforms like Kickstarter, IndieGoGo and all those crypto/blockchain-powered funding portals popping up lately. On these sites, anyone with an internet connection and loose change can chip into your fundraising campaign in exchange for future product rewards or equity stakes.

Seek institutional funding

Speaking of those venture capitalists, scoring an investment from their firms is the Holy Grail of start-up money. We're talking millions of rands, experienced mentorship and a rocketing valuation plus instant brand credibility!

Of course, VCs will demand a huge cut of your company's equity pie in exchange. And you'll likely need to have completed serious milestones with existing angel/crowdfunding traction already. The pitch process can also brutally resemble an MMA fight with your soul on the line.

New money from crypto

Want an alternative funding source unburdened from nearly as many rules and headaches as traditional investors? Then keep your eyes on the rapidly evolving crypto crowdfunding!

Thanks to clever blockchain innovation with platforms like Bitcoin Loophole, entrepreneurs can now easily mint and sell crypto tokens or NFTs on platforms like Bitcoin Loophole to quickly raise money. No begging arrogant investors who'll own most of your start-up, jumping through regulatory hoops or dealing with banking intermediaries stealing chunks of cash. Just instant programmable financing from a community incentivised to support your success!

Land a business loan

When VCs just won't pony up and bootstrapping remains too restrictive or impractical, good ol' debt financing through banks or online lenders can provide vital cash injections to sustain momentum.

More and more lenders too are specialising in start-up loans requiring minimal collateral besides potentially giving up a small equity stake. The flip side is loans need strict repayment schedules with interest, which can handcuff your operations amid minimal revenue. But access to R100 000-R1 million can work wonders when spent strategically!

Just watch those personal guarantee requirements and loan covenants. Because missing one revenue projection or burning money "inefficiently" could soon have bankers blustering for immediate payment... or ownership of your whole company. No thanks!

Apply for free money!

Did you know there are billions of rands distributed freely to entrepreneurs and start-ups annually from grants, prizes or incubator funding? Any savvy founder should absolutely investigate this no-strings-attached mode of fundraising.

Whether it's government grant programmes investing in your scientific/tech field of study or incubators supporting underrepresented founders and communities, you wouldn't believe how much free money is yours for simply applying!

Embrace revenue-based funding

Perhaps the most founder-friendly funding option of all is the surging revenue-based financing model rapidly gaining popularity for its flexibility and reasonable investor terms. This alternative to outright loans or equity divestment is exactly what it sounds like – investors provide upfront capital in exchange for a slice of your monthly revenues over a set period.

So rather than crippling debt or giving up ownership, entrepreneurs enjoy maximum growth resources without suffocating repayment schedules. There's no board seats or outside control demanded, just steady fractional payouts matching your revenue success. Much more palatable for self-funded start-ups averse to traditional VC equity grabs or operational interference.

In conclusion

No matter which customised route you forge, though, just remember that money remains the fuel for actualising those billion-rand dreams. Even if launching from your parents' basement, relying on personal credit cards, progress stalls immediately without adequate financial runways in place.

So don't deprive your million-rand app or crypto platform from reaching escape velocity. Aggressively pursue diverse funding streams early and often. Because scoring ample capital now could literally spell the difference between vapourware and generational wealth when your start-up inevitably becomes the next unstoppable tech titan!

Image source: https://www.pexels.com/photo/marketing-exit-technology-business-7413915/