What they say is absolutely true: “money doesn’t come freely.” However, if you have a wonderful idea for a SaaS solution, there are ways in which you can secure funds for a SaaS startup. Here are a few known means to get financial support for your new venture.
Bootstrap means using your own fortune to get your business going. This is a classic example of building your own company. Sure, it is romanticized, but it takes a lot of effort to realize this dream. Customarily, people bootstrapping their startup have other sources of revenues to cover their costs of living. You can get the ball rolling with your savings to bootstrap your startup or take a personal loan. Once the sales grow and proceeds are reinvested, your company will gradually and organically grow.
However, bootstrapping your startup is not the fastest way to achieve commercial success, but it has one key benefit: you have full ownership of your SaaS-based startup and your ideas.
Entrepreneurs often poke fun at government interference. But the truth is a high majority of companies would have perished without government funding. And the best thing about government grants is that you are not liable to pay them back. That said, obtaining a grant from the government can be a strenuous task. Typically, the objectives of such programs are well-specified. Resultantly, companies in specific industries meeting the strict criteria happen to be eligible to apply for these programs.
The application process also isn’t that easy since it entails a lot of red tape and forms. But eventually, it’s worth applying for. One fine example of government grants which SaaS-based companies could apply for is the EU program. This one is specifically designed to promote innovation and big data in the European Union.
Unlike government grants, accelerators won’t just hand you over a bag of money. They are more than just a way to get your SaaS initiative funded. Of course, accelerators do offer some sort of funding; but they also do a lot more to push you in the right direction. For instance, when you enter an accelerator, you are actually entering into a mentorship program that lasts for a few months.
Aside from that, you also get access to some other important resources that startup founders otherwise cannot afford on their own. Generally, startups join accelerators before they have a marketable product or service. Under the auspices of experienced mentors, you get the opportunity to gain a lot of experience and do a lot of development quickly.
In short, the operational support helps you fast track your SaaS startup journey, so be on the lookout for accelerators with an excellent track record and reputation.
Thanks to the popular Japanese program ‘angel investors,’ now the whole world is familiar with this term. Aired between 2001 to 2004, the program featured ambitious entrepreneurs who pitched their ideas in front of a supreme panel of investors better known as dragons. After completing the pitch and the Q&A session, the dragons decide whether they would like to invest in an idea and under which conditions.
Surprisingly, the unusual format of this TV program managed to provide enough drama that it successfully captivated a large audience. Indeed, not all angel investors appear on television, but they are out there and are actively seeking new business opportunities to grow their capital. Why? Well, an intelligent angel investor knows it’s essential to have a diverse portfolio.
This means they invest their personal money in ventures that they believe have the potential to make significant gains. Try pitching to the angel investors that are keen to invest in a SaaS startup Development.
It’s a professional form of funding available to SaaS startups. However, it requires you to provide venture capitalists with a solid plan. They can offer access to large funds, but they certainly want something in return. So, persuading them that SaaS-solution will transform the world is just the first step. You need to do a lot more than this.
Make sure to have a solution or product that is ready to be shipped, even if it’s an MVP (minimum viable product). And venture capitalists would love to see some track record. Furthermore, they will only take a stake in your SaaS startup if there is an exit plan. For this reason, charting out a deal with venture capitalists can be an uphill task. Still, if you can make this work, you will get a large capital injection together with operational support, expert advice, and quick access to a strong business network.
When it comes to crowdfunding, you get to see distinct flavors. While some crowdfunding platforms allow investors to buy shares, others are a way to get loans when the financial institutions are too risk averse. In brief, anyone can invest any amount in your SaaS startup with crowdfunding. Even if all the investors chip $40 or $80, a large sum of money can be raised through this medium.
However, the most popular form of crowdfunding is the one where end-users support your SaaS company financially in exchange for your product.
It also works as a fantastic marketing tool since you can leverage it to generate public interest in your product. Capitalize on the demand from the early adopters to get supporters who are interested in buying your product before it’s even ready.
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