Entrepreneurs: Fund Your Idea Today!

Do you have a brilliant start-up idea but don't know how to fund it? There are many innovative and creative ways to fund your ideas, however, it is imperative that you choose the right way for you and your business. As a Medill Northwestern University graduate student and a marketing professional, I have learned how to apply an Integrated Marketing Communications (IMC) approach with existing brands and start-ups. When speaking to entrepreneurs about their biggest issue, I found financial means is a common concern. While referencing two articles from Forbes, I will review unique ways to lessen or eliminate the financial burden of starting a business.


After determining the consumer need and business plan for your idea, and all you need are the financial means to bring it to life. I'm going to reference one article entitled "How To Start A Business With No Money" by Ryan Westwood that highlights different ways to fund an idea, such as a credit line, an incubator or accelerator, and crowdfunding.


Credit lines:  All debt is not bad, some advantages to debt include lower cost to company than equity (including tax advantages), providing a good source of funding of growth strategy, and prudent use may result in higher returns to shareholders (higher ROE). Small business and good standing personal credit may give you an advantage when applying for credit lines with banks or credit companies. Westwood suggests the American Express Plum Card as it offers a 60-day term for payment rather than a typical 30-day term. However, you should keep purchases to minimum to avoid getting bogged down with mandatory payments of interest and principal repayment.



Incubator or Accelerator:  Both are designed to provide funding. Westwood simply defines them as:  Incubators tend to be sponsored by local or regional economic development organizations (sometimes colleges/universities) and an Accelerator expects a rapid response to its investment.


While Westwood highlights Crowdfunds in his article, Carol Tice evaluates the opportunities and drawbacks of crowdfunding in her article, "The Myth Of Magical Crowdfunding -- And What Actually Works".

 

Crowdfund:  Crowdfunds are a new trend creating excitement among start-up entrepreneurs. However, there are some facts to consider before putting all your hopes into a Crowdfund. Tice suggests that Crowdfunds are ideal for small, artistic projects and many successful campaigns involve breakthrough technology, or breakthrough use of an existing technology. The reality is that only one-third of all attempted campaigns get funded, and most campaigns raise less than $10,000. Tice offers a link to a snap shot of sixteen "Top Crowdfunding Sites for Entrepreneurs". 

After reviewing the two articles and based on my IMC experience, I recommend three action items:
1. Review the pros and cons of all investment options before moving forward with one. 
2. No matter what avenue of investment you explore you must determine how you are going to build excitement around your product/service. 
3. Tailor that excitement for consumers and potential investors. 




Jennifer Bennett is an Integrated Marketing Communications (IMC) graduate student at Medill Northwestern University. Jennifer attends the program part-time while working full-time as an Account Director with the Leo Burnett Group in Chicago. 
 
LinkedIn:  https://www.linkedin.com/in/bennettj 
Twitter:  @bjm110