What's The Best Way To Raise Money - Entrepreneur Poll

[rogercbryan]

Over the past two weeks we’ve been asking you what the best ways are for young entrepreneurs to raise money.

The goal here is to create a list of suggestions for new and existing entrepreneurs to refer to so they can effectively fund their business ideas.

We’ve had some great posts created and a lively discussion is going on.

So far the top responses are:

#1) Friends

#2) Your Own Savings

#3) Family

#4) Angel Investors

#5) Venture Capitalists

#6) Licensing Your Idea

#7) Reverse Mergers

#8) Private Placements

#9) Banks

Are friends really the #1 way to raise money for a young entrepreneur? How have you raised money for your business or how do you plan on doing so? Weigh in on the discussion by having your say on our forum post. Please share your advice so other young entrepreneurs can learn from your thoughts and experiences.

#1 Your own savings
#2 Friends / Family (they should be one catagory)

I also do not see credit cards any where on there....???

[jasaunders]

I don't see a dozen other options on that list either.

This is a stupid thread, there is no "best" way to receive funding. It's like asking "What is the best way to make money?" or "What should I be when I grow up?"

[stockmarketreviews]

noone bets on newbie .. you need to prove yourself first before someone bet on you . so best way is use your savings and if you are really confident take the loan .

[collegemogul]

Some entrepreneurs get too focused on raising money in the beginning. Depending on what you are looking to start, get a cheap simple prototype up. Test market demand, and then start raising capital. The company will be perceived at a higher valuation because a portion of the risk is reduced and you will be able to give up less equity for more money.

[Danielius]

In my personal opinion, the best way to raise money is:

From the start, don´t take money from your friends. Eventually, one week sooner, one week later, your friendship will be threatened by the burrowing money issue.

That's why internet is so usefull in starting marketing plans as a source of collecting money.
A strange is far more helpfull, than a friend, when it comes to talk about money.

There's a portuguese saying that says: " If you want to loose a friend... ask him for money".

[DBeavers]

My preferred method is to start a self-financing business. If you can find a business with no major need for inventory or equipment, and withdraw no more than 10 to 25 per cent of the early profits, you'll have 75 to 90% of cash flow available to pay current expenses and to finance growth. If you already have a job of business that meets your family's needs, than let the business finance its own growth.

I started on a shoestring nearly 24 years ago, working strictly after hours for the first 3 years. By then, I had established myself with a small base of clients, so that in shifting to full-time self-employed I had additional time to find new customers through networking and referrals from satisfied clients.

Even while I was only working part-time, the business generated enough cash flow to pay the monthly expenses for my business vehicle, advertising, dues for membership in the local Chamber of Commerce, and a little extra here and there.

Once I expanded to full-time, I had the experience and demonstrated cash flow, that borrowing from banks and getting credit cards issued to the business was no problem.

One big stumbling block for some people is having the discipline to not start living off the profits until the business is self-sustaining. Many entrepreneurs have the mindset that they have to show off their success by spending money. Any little hiccup in the cash flow, a few slow months, or unexpected expense, and all the business can fail due to being under-capitalized. Quite similar to individuals who win a jackpot and start spending money and acquiring debt beyond what the prize can cover.

Self-financing the business from the profits was a sure thing for me, and meant I wasn't paying high interest rates to borrow, so the profits actually went further.

And future lenders will appreciate the demonstrated financial discipline.

Dennis

[cwish001]

I haven't seen much about SBA backed loans the few stores that I have dealt with have gotten their start via that route

[Scunizzo]

Thank you everyone for your feedback! We've just posted the final results in our blog:

YoungEntrepreneur.com Blog » The 8 Best Ways To Raise Capital - Entrepreneur Poll Results

[pjoe21]

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[synart]

Well, we wanted to start a forex brokerage company and needed a lot of money to develop a well working system. The easiest way for us to raise money for the development was to start one of our financial solution ideas where we can guarantee cashflow for investors who paid for this cashflow as a purchase price. In this way we could manage to raise about 1 million USD within 3 month's.

[wackoo_jackoo]

first thing you need to work out when raising capitol is how much?
this will greatly effect the people you will need to ask.

[johnwillis]

if you have 10,000 dollars, its easy to throw it away on needless business expenses. use that money as if an individual were spending it. you can get a brand new computer for 10,000 dollars retail, or you could get one that is 90% the performance for 1/10 of the price on ebay. use your money wisely, just because you have it does not mean you need to spend all of it.

[david2008]

i think to make a droppshipper which raise more money

[leozone]

Many people say you start with friends and family. I would much rather raise money from independent angel investors that can see my vision and be ready to share risk and reward. my start up got private business loan through the private equity loan program at Private Business Loans, Angel Investor Business Loans, Angels Funding Individual angel investors would be my preferred option to raise expansion capital. i am currently looking at the trial program at About Angel Investors, Meet Angel Investors, Angels for all Worthwhile Deals

[Dean-123]

I think the best way is refer to what you sell, if you sell the products, you can use ebay. But if you sell service you should build up your own website.