How To Raise Money for Your Startup: A Beginner’s Guide to Bootstrapping

Do you have a thriving business, but no cash? Are you excited to expand your business and can’t find the money for it? Do you want to keep your costs low and avoid taking on debt or other financing options until your business is profitable?

Raising capital from investors can be an expensive, time-consuming process. You might even worry that going through the process will drive investors away or make them think your company is not worth investing in.

But, putting money into your business can be challenging as well. If you don’t have anyone to invest with yet, it may seem difficult to attract outside capital at this time.

Fortunately, there are ways you can raise money for your startup — even if it’s a new venture without outside capital yet. This article will explain what is meant by “bootstrapping,” plus offer a few tips on how to go about doing so.

What is bootstrapping?

According to Investopedia “Bootstrapping describes a situation in which an entrepreneur starts a company with little capital, relying on money other than outside investments”.

Bootstrapping is the practice of funding a business without external investment. There are many ways to bootstrap your startup. You can launch a crowdfunding campaign, use low-cost or free services, or find potential partners. You can also borrow money from family or friends. Let’s look at each one of these methods in detail and see how they can help you raise money for your business.

How to bootstrap your startup

First, you’ll need a product or service that people want to buy. Before you can get customers, you’ll need to build a product or come up with a service people will pay for.

Next, you’ll need to find reliable leads. You can find potential customers via social media, business networking, e-mail lists, lead-gen sites and more. We will explain the process below.

Once you have customers, you’ll need to keep them. You can do that by keeping your pricing low and offering good service. You’ll also need to get creative about marketing your business.

Bootstrapping basics: The essentials you need to know

If you’re serious about bootstrapping your startup, you’ll need to get serious about your business.

Start by listing all the expenses related to your product or service. Once you know what those expenses are, you can get serious about saving money to cover them.

Next, you’ll need to get serious about hiring people. Bootstrapped startups often struggle to hire, but having a few employees can help you cover expenses. If you have several employees, you can cover expenses such as insurance, retirement plans, health care, PTO and more. Platforms like GoHire.io and Zoho Recruit could offer inexpensive interns or fresh graduates to test your ideas and validate customers.

Next, you’ll need to get serious about marketing. Bootstrapped startups often struggle with marketing because they don’t have the cash to pay for marketing.

However, marketing is one of the keys to long-term success. You can get started with free or (very cheap) marketing tactics, such as blogging, creating videos and using social media. Web hosting services like Bluehost or wix.com provide user-friendly and inexpensive platforms for non-technical startups to create their websites and blogs.

Finding reliable leads for your startup

You’ll need to find reliable leads for your business. At first, you can find leads using social media, networking and more.

You can also tap into lead-gen sites that offer leads for free.

You can also use paid sources, such as lead-gen ads, paid email lists, paid social media ads and more.

Once you have leads, you’ll need to turn them into paying customers. You’ll do that by offering a product or service that solves their problems and offering it at an affordable price.

You can also use free and paid marketing tactics, such as email marketing using a tool like Active Campaign, to help you engage with customers and convert them into customers.

Another way to generate leads is to become a member of an industry group, attending trade shows and other events, sending out information through your website and social media channels, and so on.

Become a part of the industry groups related to your product or service and reach out to the members. Collect their emails, names, and addresses and make a note of them. You can then use these as leads for your business.

Tips for raising money while bootstrapping

To succeed while bootstrapping your company, you’ll need to keep your costs low. That will help you cover your expenses and make sure you don’t take on debt.

Keep in mind these possibilities for raising money while still bootstrapping:

– Build a strong network of contacts: If you try to go it alone, you’ll likely fail. Bring someone in from the outside into your network of contacts (a family member, friend, coworker) and ask them to help you over the rough spots.

– Find a business partner: Partnering with someone else can be helpful because you can split the work and make it less overwhelming. It can also help you find an investor.

– Consider a debt funding option: Some businesses have no choice but to go this route since they have no equity funding option. If this is the case for your business, you might want to consider a debt funding option.

– Partner with a trade association or other organization that supports your industry: An organization that you have partnered with in the past may be willing to help you raise money for your business.

– Consider equity crowdfunding: Some online equity crowdfunding platforms allow businesses to offer equity-like shares to investors. You have to make sure that the terms of the deal are fair to shareholders.

Conclusion

Raising money from investors can be a time-consuming process, even if you are well-connected in the business world. You might even worry that going through the process will drive investors away or make them think your company is not worth investing in.

Fortunately, there are ways you can raise money for your startup — even if it’s a new venture without outside capital yet. This article will explain what is meant by “bootstrapping,” plus offer a few tips on how to go about doing so.