Innovative Ways To Raise Startup Capital For A Business
“In these tough economic times, it is difficult to raise venture capital for a great business idea. However, with some thought and ingenuity , you can find creative alternative ways to raise capital. This article will discuss some alternatives.”
A few months ago, I found a great business opportunity; a young lady was selling a Subway restaurant in a large shopping mall. The price seemed too good to be true but it was still more than I could afford. I have never owned a business before; this was my first foray into trying to raise capital for a business venture. I did a lot of internet research and I stumbled upon a website that helps people with great business ideas meet people who fund businesses. The website is http://www.gobignetwork.com. Gobignetwork is free to join, so I put my Subway restaurant idea on the site. Within a few days, several potential investors contacted me by email and by phone. In the end, the deal fell through. When the Subway owner sent me her financial records from the business, it no longer made sense to purchase it. She was losing money, and fast. I decided to withdraw my venture capital request on this particular business. However, I feel that if I had decided to continue with this venture, I would have had a pretty good chance of getting funded if her business were more sound.
Here is what I learned: economic times are tough. Venture capitalists want to invest in safe, secure, and proven business ideas. One of the venture capital companies that found me on Gobignetwork called me and told me this verbatim. He said that the only thing they like investing in during the current economic crisis are proven business models like restaurants, car washes etc. They are very wary of internet businesses and other non-traditional concepts. Just as he told me this, I was coming up with a tremendous idea for an internet business. The day that I came up with the idea, I couldn't sleep; it was that good. I presented the idea to one of the companies that contacted me on Gobignetwork. They loved the idea, but there was a huge problem; I wanted a domain name that was key to the idea, but the current owner of the domain name wanted a lot of money to sell it. The venture capital company said that there was no way that they would pay for the domain name, especially in the current economic environment. So I was stuck. I had a great idea that I knew would be killer, but it was impossible to get funding.
Then, it occurred to me that I could try to find innovative ways to raise money. One of my inspirations was Alex Tew, a young internet entrepreneur who came up with an incredible idea to raise money. He created a website called the Million Dollar Homepage. He sold individual pixels on his website for a dollar apiece. He made a million pixels available for sale. He sold all million pixels in less than 6 months and raised over $1 million (he sold the last few pixels on EBay for over $30,000)! Wow! Imitation is truly the sincerest form of flattery, so I studied Alex Tew's concept and I asked myself: How could I improve on his idea? I noticed a couple of things about his site:
1. To be honest, the site looks horrible because there are just a bunch of random images that don't make any sense together.
2. The second thing is that, for the most part, the links are to very low quality websites that very few people would actually want to visit. So I saw a lot of room for improvement.
I started thinking about how exactly to improve on Alex's great idea. The first thing I knew was that I wanted to create demand by creating a sense of quality and exclusivity. Nobody wants to be involved with what is a dime a dozen, they want to be involved with what is unique, rare, and a status symbol. Evidence for this is apparent in the popularity of the Iphone, as compared to cheap, generic phones offered by cellphone companies. I wanted my website to have a small, narrow entrance that would eliminate all but the highest quality sites. I realized that this meant that my site might not grow as fast as Alex's, but I believe that in the long run, my site will sustain itself much longer due to the higher quality of links.
So here is what I did; I took Alex's concept and completely reworked it. Alex's site had a lot of imitators, but mine adds several twists. First of all, people can only order my site’s service during 1 hour per day. This raises the anticipation because the potential buyer has to wait for the purchase. Second, I screen all orders, and only accept the best ten submitted in that hour. Do you see the difference? Alex allowed virtually anybody to advertise on his site; my site is very exclusive. I did all of the work on the website myself and I finished it and put it online about two days ago. From beginning to end, I put about 5 days of work into coming up with the concept and then actually designing it. I showed it to some trusted friends and I got a lot of great feedback. I took another day to make the recommended improvements, and then I put it online. Now comes the hard part, how do I get traffic to the site?
I decided that I was not going to spend a lot of money out of pocket for the site. I spent about $100 for the domain name and hosting. Then I found free ways to advertise it. One free resource is Craigslist. I posted a single ad on Craigslist promoting the site in the NYC Craigslist. I figured that New York is a huge market and a good place to start. I also put out a free press release using a free press release service. If you do a Google search for "free press release", several very excellent companies will come up. All of them require you to register with a username and password. After I did this, I researched other ways of getting word about the site out. An excellent and affordable way to advertise is local softball and baseball teams. They travel around your region and, normally, if you sponsor them, they will display an ad for your business at their games. One of my friends coaches his son's baseball team. Sponsoring their team for the entire summer costs $300. This money helps them to buy uniforms and to pay for travel expenses. In exchange, they display a 3 foot by 6 foot banner advertising your company at every game. I think that this will be money well spent. The final means of advertising that I discovered is the one that you are reading right now; putting your experience in articles and blogs in a way that people learn from your experiences. Nobody wants to be beaten over the head with a website name, but they do like valuable information. Perhaps some of the information that I have presented here will help you to make wise decisions in your quest to fund your business idea. Will my website be successful? You will have to be the judge. You can watch as it grows over the next few months at......drum roll, please........http://www.acrossad.com
-The Acrossad.com Guy
Author - Acrossad.com Guy
Tags - ads, advertise, Christian, advertising, promotion, adwords, ad, promote
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