Startups are the lifeblood of progress; they invent new ideas and concepts and turn them into reality, pushing humanity forward and changing the world. But what happens when you want to start your own? How do you get funding for your technology startup? You can’t just walk into a bank without any credentials or experience and expect them to hand over stacks of cash. The good news is that there are other options! Here are some strategies for getting funding for your tech startup:
License your Technology or Concept
Startups like to keep their intellectual property (IP) close to them, and licensing is a great way to get funding without giving up control over what you’ve created. Licensing means that you give another company permission to use your IP in return for money or resources now and/or royalties on future sales down the line. You can license out any number of products, but software patents are particularly popular with startups because it’s easy to track how many people have downloaded an app from Apple’s App Store or Google Play. Some notable examples include Facebook getting $150 million worth of cash and stock options just by licensing some of its patents to Microsoft, and Uber’s sale of some mapping technology for as much as $500 million.
Sell a Share of Equity
Finding investors is one of the most common paths toward funding a startup. There are various levels including seed, angel, and venture funding. In all instances, you’re sharing some equity or a percentage of ownership in your company with investors in exchange for their money. Investors buy a share of your company, banking on the fact that it could grow exponentially over time if the business takes off. Of course, this means that you’ll have to give up part ownership of what you’ve been putting a lot of effort toward, but if it ends up being worth millions or even billions down the line then no one will complain about the size of their slice of the pie!
Crowdfunding
One of the best ways to get funding for a tech startup is through crowdfunding. Crowdfunding takes some preparation because you’ll need to create an attractive pitch that will draw in lots of investors who are willing and able to pledge large amounts of money (it’s not like Kickstarter where $20 gets you something cool). This means creating videos, graphics, and other content related specifically to your target audience so they know what benefits there are if they invest in your company. Crowdfunding is starting to become more mainstream after companies like Oculus Rift made millions selling their headsets directly instead of going down the traditional venture capital path.
There are many different strategies when it comes to getting funding for technology startups but these are a few of the most common. The key is to be creative and develop a unique solution that can work for your specific product or service. If you’re passionate enough about what you want to create and willing to get creative, you can make your dream a reality. Don’t let funding get in your way, there are plenty of people willing to support a great idea or concept.
If you have a great idea but are struggling to find funding, reach out to our team. We have a variety of investors and investment methods that can help you launch your MVP and get your idea to market.
