Getting Finance For An Internet Business
Times really are a changing!
When I started in business, the way to raise finance was to save up or tap
family and friends. The internet has brought us new and innovative ways of
finding investors.
First, there was the emergence of
Zopa (UK) and Prosper (US) type
"social lending" platforms where suppliers and consumers of credit can
find partners and settle into happy marriages. At first, lenders were
wary. Why would they lend to someone they didn't know? Wasn't that a
recipe for losing money? Then they discovered that, like the new
generation of platforms for doing business, there was a new generation of
protection mechanisms for the online lending market. Investors could
choose their return based on the risk they were willing to take and that
risk was shared across multiple lenders via clever software. Soon the ones
with the money realised that it was a convenient and profitable and far
better than salting their funds away in a bank.
If you're an entrepreneur with good credit you didn't need to go to the
bank any more. You had places like Zopa and Prosper. But, that wasn't
enough. Borrowing money at online markets involved entering into a
commitment to paying it back. Because it was, after all, a loan. And the
problem with even the most successful entrepreneurs is that not all
projects end up profitable, there's no guarantee they'd make the money to
meet the repayments. They needed not just a loan partner, but equity
investors.
Enter sites like Kickstarter
(for creative types and artists),
Feed The Muse and SellaBand
(for musicians), Spot.us for journalists and
Catwalk Genius (fashion
designers). This brought Dragons Den type bidding for and receiving
investments based on the quality of the idea and its potential for
success. Suddenly now, innovative heads from all over the world have
access to make their business ideas and dreams come true! Bad ideas will
still fall by the wayside, but good ideas aren't restricted anymore by
lack of avenues for finance.
Even business clubs got in on the act by combining their expertise at
helping startups with financing from the likes of Zopa as
PRIMEbusiness has done.
Primebusiness is aimed at over 50s and helps them start business/become
self employed. Their partnership with Zopa adds the missing ingredient
that opens up new vistas for those enterprising individuals who find
themselves out on the corporate redundancy scrap heap.
Such innovative financing options aren't limited to entrepreneurs with
high flying, multimillion dollar projects in the developed countries.
Microfinancing has seen the loans of small amounts to low income folk from
the developing world. From a $100 loan
to a goatherder
in Mexico to the 5.5 million borrowers to whom
ASA lent an average of $110 each,
microfinancing is big money. ASA's total disbursement to date is over
$5,000 million. The overall impact of services like ASA and
Kiva isn't just to attract the right
people into business - they have a huge influence on taking people out of
poverty, empowering them and improving lives in the third world.
For those entrepreneurs wanting to start technology, mobile and internet
based businesses - the type of people who hang out at
experienced-people.net -
there are numerous options, from Venture Capital Funds to Crowdsourcing. Grow VC, like
other online venture capital firms, describe their services as Venture Capital 2.0.
If traditional outlets don't understand your eBay or Amazon affiliate
model and are unwilling to finance working capital requirements, there are
the likes of Kabbage.
This is the day and age of new possibilities. Tap into the modern way of
financing a startup or the
purchase of an existing web business. For further help
register
on the forums where you can discuss this article with other entrepreneurs
and investors.
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