Small Business Technology

Ways to Raise Funds for Your Online Marketplace Startup

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Beyond having a solid business plan, the products, market knowledge, and extensive experience, you need enough funding to successfully open and run an online marketplace platform. However, raising funds for launching online marketplace startups is often challenging for most aspiring entrepreneurs. 

It’s for this sole reason most potential business owners give up and return to their nine to five jobs. Even if you have the funding to kickstart your online business, you’ll still need money to expand your business or keep it afloat, especially during economic downturns.

In fact, lack of funds is one of the primary reasons most startups fail. However, the lack of funds shouldn’t stop you from starting your online business. All you need is to find reliable financing sources to help you build and launch your great online marketplace platform. One of the fastest and easiest ways to get funding for your online business is by applying for a payday loan with a recognized online lender like My Canada Pay.

There are many reliable ways to finance your online marketplace startup if you don’t have enough savings or simply lack the funds. In this article, we’ll look at some of the best ways to raise funds for launching your online marketplace startup:

1. Bootstrapping/Start Saving

One of the easiest and safest ways to finance your online startup is by investing your own money or using collateral on your assets. Injecting your personal finances into the startup business means that you’ll not have any debt linked to your business. By investing your own money, you demonstrate to lenders and investors your long-term commitment to the startup and your readiness to take the risk.


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You can kickstart your business using a SaaS platform to develop your marketplace and acquire customers organically to monetize your marketplace platform. Self-funding also gives you the freedom to run your business your way. While saving for your startup business can be challenging, it allows plenty of time to research the market to ensure you’re selling the right products.

2. Crowdfunding

In the last few years, crowdfunding has gained immense popularity as an effective way for raising funds for new businesses, including online marketplace startups. This funding option involves raising the funds you need for your startup business via a community-based investment. With crowdfunding, you get to enjoy more financial freedom and flexibility than a majority of the other sources of funding.

To raise funds through crowdfunding, you should create a campaign on a crowdfunding platform to promote your online marketplace business to potential investors. This allows you to demonstrate your solutions, services, and products to attract potential investors who can fund your startup. Besides helping you acquire funding, crowdfunding is an excellent way of marketing your products and increasing brand awareness. You can find many established crowdfunding platforms online, such as GoFundMe, Kickstarter, and Indiegogo.

The best thing about crowdfunding is that you get to retain complete ownership of your company since investors don’t demand equity. You also get the funding you need fast, and you don’t lose your cash if the business fails.

3. Venture Capital

Besides crowdsourcing and bootstrapping, you can also finance your online business idea through venture capitalists. This option is usually equity-based fundraising, whereby a venture capital firm invests in your online marketplace business for potential earnings and higher returns. With venture capital funding, you don’t pay interest for the investment; instead, you offer the investors a take in your business.

Venture capital can be a great choice, especially if you have an outstanding business idea and need a large capital to actualize it. Venture capitalists, however, have the power to take part in all crucial decisions regarding your business development. If capital is the only thing stopping you from actualizing your online marketplace idea, then you might want to give venture capitalists a try.

4. Angel Investors

Almost similar to venture capitalists, angel investors invest in promising startup ventures in exchange for a share in the business. If you decide to raise funds through angel investors, you’ll have to give out a certain share of equity in your online marketplace platform.

Most angel investors are usually influencers or successful business people with higher financial resources looking for investment opportunities within their industries. Apart from investing their money in your business, angel investors will provide their knowledge and experience to help take your online marketplace to the next level. Beyond giving advice, angel investors can also share their important contacts with you to get your online marketplace platform off the ground.

5. Incubators or Accelerators

Business incubators are firms that provide financial resources for new and growing businesses. They usually work with government agencies, venture capital firms, and research institutes to help startups in their earliest stages by providing financial assistance, marketing, infrastructure, and networking. Incubators and accelerators often select several promising startups and invite them into a three to four months program.

Selected startups get to learn some of the best ways to manage, grow, and develop their operations during that period. And have an opportunity to meet and pitch their business ideas to potential investors to persuade them to invest in their businesses. Choosing to raise your startup capital through accelerators and incubators is an excellent way to learn and gain vital knowledge about running and growing a business, which will come in handy in the future.

Endnote

There are many ways to get the capital you need to get your online marketplace up and running and expose you to new customer bases. From bootstrapping to incubators and accelerators, each of the above funding options has its pros and cons, so make sure you research and carefully go through each option to help you choose the best one for your marketplace startup.

It’s critically important you have a convincing business structure and plan in place, since that’s what will attract and get most investors interested in your online marketplace platform. Apart from financing, it’s also crucial you evaluate the amount of influence an investor will have in your company before accepting funding from them.



Editorial Disclaimer: The editorial content on this page is not provided by any of the companies mentioned and has not been endorsed by any of these entities. Opinions expressed here are author's alone

The content of this website is for informational purposes only and does not represent investment advice, or an offer or solicitation to buy or sell any security, investment, or product. Investors are encouraged to do their own due diligence, and, if necessary, consult professional advising before making any investment decisions. Investing involves a high degree of risk, and financial losses may occur.


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