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Insider Secrets on How Tech Startups Get Funded Discovered

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The difficulty of launching a tech startup lies in the fact that the competition is tougher than ever before; on the other hand, there are some advantages, as well. In case you succeed, you stand at the brink of an amazing ROI. Next, you can launch with a lot less than it would take to start a standard small business.

Finally, you have more funding ways available than ever before, which means that you need to start exploring these options as soon as possible. With that in mind, here are six ways for tech startups to get funded.

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1. Crowdfunding

The advantage of tech startups lies in the fact that they often create a groundbreaking service, tool, or platforms. This is usually something people are interested in, even something they lack in their day-to-day life. Imagine the kind of revolution that the Uber app introduced to the world of the urban commute. In other words, it’s something people would pay in order to gain access to.

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This is what crowdfunding is all about. Nevertheless, do not expect everyone to instantly realize just how revolutionary your idea is. You need to make a compelling presentation and do your best to persuade them.

2. Preorders

The next thing that a tech startup, especially one with the compelling presentation on their side, can make is the preorder system, which will allow them to capitalize on their products long before it actually ‘hits the shelves’.

When it comes to app and platform developers, the price of making a single item is the same as the price of making every single copy out there. This means you get the most out of this system as software, not as a hardware developer. This also works by capitalizing on the good old FOMO phenomenon.

3. Attracting investors

Another method you can try out is to take a bit more traditional approach by trying to attract investors. Still, there are certain expectations that a tech startup needs to fulfill, which may not be industry-specific, yet, are not under a spyglass.

First of all, your website’s design, response time, and responsiveness must be impeccable. Second, you need to be search engine-friendly, which is why you might even want to consider outsourcing this function. If your startup is based in, let’s say, New York, seeking out and employing a New York SEO company yields an astoundingly positive ROI. It is also a great method to get ahead of both your local and global competition.

4. Selling equity

One trend that is not so popular is the idea of selling equity in a company early on. Think about it, we already mentioned that the value of your startup might increase several times over.

This would mean that the $1,000 fraction of your company you sell today might work 10 or 100 times more in the future. Nonetheless, it gives you some additional support, the money you need, and the help in several other ways.

5. Join a startup incubator

Joining a startup incubator is yet another industry-specific solution you might want to look to exploit. Startup incubators are ventures, usually in tech havens such as San Francisco, New York, and London, that provide startups with all they need to make their first steps in the business world.

In turn, they get a share of their profit. While this may not seem that promising (from the perspective of the incubator owners) the ROIs in this industry are such that a single successful startup may make up for dozens of failed ones.

6. Look for angel investors

At the end of the day, there’s always a chance that you’ll appeal to an angel investor. The greatest benefit of this is not in the money but the experience and contacts that angel investors bring along. Furthermore, they can also offer to tutor you a bit on the rules of the business world which is a helping hand you can never afford to turn down.

Conclusion

The most important thing about the source of the money you launch lies in the fact that it determines your company’s future for a prolonged period.

It decides who has the control of the company, who you have an allegiance to, and how significant portion of your profit you’ll have to forsake in order to make up for this initial deal that you’ve made. Nonetheless, without the money, there is no company, which makes the situation into an even greater no-brainer. Choose wisely!

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