Tapping Funding Sources to Make Ideas a Reality
By Saghir Aslam
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live with dignity and fulfill their moral obligations towards charitable activities)
I have an idea that I think could save lives. It was inspired by my mother’s constant acts of kindness; she taught me that success isn’t about putting your own wants and needs first. The business model I developed for my companies would donate percentage to a person in need for every unit that is sold-that will save twice as many lives, I hope. How do I find the funding?
My mother was inspiring woman who taught great morals and ethics through her own example. By encouraging me to focus on how I could make life better for others, she gave me a wonderful foundation that will serve me well in the business world. (I am writing this to dedicate to my wonderful caring mother). I thanks to my superb mom, the way she taught me in a very soft exemplary way not telling me but actually she was doing it. She is still in me as a guide, motivator, a source of encouragement and actuation.
I go in the business for all the right reasons. So many people think of entrepreneurship as a way to get rich quick, but that rarely turns out well. If enterprise doesn’t make a difference in people’s lives, then I shouldn’t be in business at all. It’s that simple.
Money should never be an entrepreneur’s only motivation; if you don’t care about your product and its purpose, no one else will either.
Building a prototype isn’t always an essential step, but mine might help you to land investors by showing them how the product will work. It really can change attitudes.
I am far more likely to get interested in a product when I can actually see it. Try to keep costs as low as possible.
Your prototype should demonstrate your product’s most important functions and look good-but keep it simple. To capture investor’s attention, it must be easy to understand. Finding a source of funding for a start-up used to be a bigger obstacle that it is now. In the past, entrepreneurs used to have to carry their business plans from one company to the next, trying to sell their ideas. This process could take years and often ended in disappointment.
But times have certainly changed – support for startups has never been stronger. There are now throngs of investors, companies and organizations looking to invest, hoping that the next big thing will come their way. Crowd-sourcing and government loans are two other options for aspiring entrepreneurs.
But you are not ready to launch yet, and funding for a prototype can be a bit more limited. Many people pay to build their own prototypes since that can greatly improve the chances of their receiving crowdfunding or investment. Potential investors like to know that you are committed to your idea, and spending your own money on that idea will go a long way toward convincing them.
Reaching out to family and friends
If self-funding is not an option, try reaching out to family and friends. There are few people better suited to doing business with you than those who know you are best. You already trust their judgement, and they more than likely already believe in you and your plan.
If you are involved in a community of smart and creative people who might be able to help you to realize your dream. Have you thought about approaching your classmates? If not, it’s time that you did. You can also look into accelerator programmes. An accelerator is a group of people that provides a small amount of money in exchange for a stake in your company. They usually offer hands-on guidance and mentorship, and they can introduce you to investors and prepare you for a longer funding journey.
Generally, all you need is your idea, and the accelerator will act as a guiding force, pushing you to succeed. If you don’t want to give up any equity in your business, then a loan is the way to go. Organizations exist elsewhere – seek them out. You have clearly got the right spirit, and it sounds like you are onto something great with your idea, so now it’s time to start reaching out. Don’t wait to get started – there is no time like the present. Good luck! If you are able to, it’s best to pay for your prototype yourself – this proof of your confidence in the idea will attract investors. If not, which of these options works best for you?
1) Family and friends are ideal investors, since they believe in your business – and in you. I want to share with you personally, I do not believe borrowing from friends and relatives. I like them and keep them as family and friends only. I rarely look for other sources, when you are borrowing or getting family and friends, risk you face is if business does not plan out. As you have planned, you could have problems with family and friends.
2) Accelerator programs usually provide advice and mentorship in addition to funds, but in exchange for a small stake in your company.
3) Taking out a loan will mean that you will remain the sole owner of your company. Be sure that you have a solid plan for paying the money back.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)