Startups are characterized by very high involvement in innovation and good growth prospects. It attracts a variety of investors looking for high returns. Capital for startups can be raised from venture capitalists, business angels, or crowdfunding funds, as well as from larger and wealthier companies. Venture capitalists often target startups with a high chance of passing the so-called valley of death. In later scenarios, successful product companies can be bought out by tech giants or go public on the stock exchange.
The help of business angels can be very helpful to a fledgling investment project. They can fill gaps in funding at a stage when the startup has not yet attracted the attention of large companies (Janaji, et al., 2021). At the same time, angels invest important nonfinancial resources, such as business advice (Cox, et al., 2021). For example, Angel Capital Association is a community of experienced high-net-worth investors with 14,000 members. It can be useful for a young startup funder to join its community.
Crowdfunding is a new and dynamic landscape for funding startups. Its main feature is the massiveness of investment because many ordinary people with no experience often donate money for overall success. A good crowdfunding campaign can promote a startup by attracting big players (Cai, et al., 2021). The third way to develop a startup is to attract investment from large venture capital funds. The project should overcome the first seed stages for opening venture doors. The GV venture fund from Alphabet allocates financing to fairly successful innovative products.
Crowdfunding using Indiegogo is the best funding option for the Tru Royalty Travel Campaign. This platform has no restrictions regarding geography and type of startup. Since this social project is very relevant and the target amount is small, a very active media involvement can create a very busy public response. The application process for registration on the platform has several stages (“Indiegogo 101: Fees, Setting Up a Campaign, and More”, 2020). A founder should upload a detailed project description to the forum and choose a funding scheme, a timeline, and the campaign’s financial goal. It is important to remember that the creator must constantly update the product’s progress to maintain interest in it.
High tech is a key component in today’s fast-paced business environment. There are so many high-tech startups on the market, and the competition is enormous. As this article points out, new project founders should use various funding sources to come out as a winner in this race and not hesitate to promote their products actively.
References
Cai, W., Polzin, F. & Stam, E. (2021). Crowdfunding and social capital: A systematic review using a dynamic perspectvive. Technological Forecasting and Social Change, 162, 120412. Web.
Cox, K. C., Lortie, J. & Stewart, S. A. (2017). “When to prat to the angels for funding: the seasonality of angel investing in new ventures”. Journal of Business Venturing Insights, vol. 7, pp. 68-76.
Indiegogo 101: Fees, Setting Up a Campaign, and More. (n.d.). Easyship. Web.
Janaji, S. A., Ismail, K., & Ibrahim, F. (2021). “Startups and Sources of Funding”. School of Business, University Technology Brunei, vol. 2, № 8, pp. 88 – 92.