Things can get frustrating for startups trying to raise funding. When no angel will invest you might find it impossible to secure any form of small business loan. There are plenty of loan companies out there, but what if they reject you too?
It's not as bad as it sounds because of those companies that do raise funding 60% of them never managed to raise a second round of funding. In short, it's not the end of the world if you don't get the investment you seek right now. This guide is going to show you how you can fund your company anyway.
Try Bootstrapping Your Company
It's not always necessary to search for large amounts of money to run your company. Sometimes an angel investor rejecting you can be a blessing in disguise. It gives you the chance to be resourceful and bootstrap your company. This is the act of taking your company and managing its affairs by yourself.
You're taking that company and you're bartering services, operating using small amounts, and even digging into your savings. An increasing number of companies are carving out a niche business in this way.
Consider Changing Your Business
Sometimes you still need money and bootstrapping your company isn't going to work. You might want to think about how you're going to change your business to make it more attractive to investors. This is a great tactic to adopt because it gives you another chance to attract funding.
But how do you know what to change about your business?
The chances are the investors who rejected you would have given a reason for rejecting you. And if they didn't you should go back to them and ask. It might be that your idea didn't seem like it had any commercial viability. It also might have been because someone else just had a better idea than you.
Find out and then you can do as successful leaders do and change the way you do things.
Use Your Personal Assets to Get Ahead
If you're looking to create a new market category and investors just don't understand you there's little you can do about this. You have to make them see that they were wrong about you. Dig into your personal assets and use those to help boost your business.
It might be the case that you have a second home or a boat you could sell or lease. You might even decide to take out a second mortgage on your home. This can give you the money necessary to help get you through the first few months and years of your startup.
Take note that this can be a difficult step to take. If everything goes wrong it could ruin you personally. This step isn't recommended if you have a family or any dependents. It's not fair to them.
Scale Down and Return Later
One of the most common reasons angel investors won't invest is they don't believe an idea can work. They don't believe in your boastings and they're not buying your optimism. You can only walk away because you're never going to change their mind. But if you still need the money the only way you're going to do something about it is by scaling your ideas down.
For example, you could scale everything down and demonstrate that there is demand for your product on a smaller level. Even showing a huge growth rate on a smaller level can do a huge amount for angel investors. Go back to those same investors and show them that you have tested your idea and you have the results to prove it.
There's nothing preventing you from going back to those same investors for a second pitch.
Try Family and Friends
One of the last resorts available to you is to go to family and friends. Ask them about potentially giving you a loan. You may either take their money as a standard loan or you could give away a share of your company in return. Working with family and friends can be troublesome, so make sure you're sure of this decision before you go forward with it.
Many close relationships have been shattered because of business ventures gone wrong.
Conclusion
These are just some of the avenues you can go down if your chosen angel investors have rejected you. You can either continue to pursue funding from those investors or you can go at it alone and try to use what you already have. There are no right or wrong answers. Think about what works best for you.