If you and your startup are at the development stage, you are facing an exciting, but also very hard and demanding time. It is during the development stage that your startup core must be prepared. Here you have to build, program, invent, etc., until you have the first version of your product. After that, you have to start testing - does the product work, does the market respond as expected, can you attract customers, etc.
At this stage, a great many companies need funding to develop their product, but since the basis for the company is still very uncertain, must many look for alternative forms of financing to the traditional investment or loan. At this stage, it is advantageous to apply for funding in the categories:
- Family & friends
- Startup competitions
- Accelerator programs
- Crowdfunding
- Entrepreneur grants
Many of the options come again from the blog "Part 1: How to get funding for your startup - idea/concept stage", and they do so because at the development stage you are still completely new to your business, and in many cases have not yet proven so much. However, some additional funding opportunities creep in the further you climb the ladder, at the development stage there are especially 2 new exciting funding opportunities that you should know about.
Family and friends
This option naturally requires that you have someone in your family or circle of friends who can afford to lend you money. If you are lucky enough, such a loan can be very favorable for a start-up entrepreneur. Firstly, it can be easier to be allowed to borrow money from people you know, rather than for example the bank. In addition, together you can make some terms for the loan that can benefit you during the time you spend developing your product.
Be aware that when you borrow money from people you know well, it is a really good idea to have some clear guidelines written down in a formal agreement document so that both you and your lender know what is expected. Make sure you get a lawyer to go over the agreement document.
Accelerator programs
Something that is really popular among both Danish and foreign startups are accelerator programs. Here, the startup enters a specially designed development process that aims to help the startup grow. In some accelerator programs the founder receives a "salary" for participating, other programs offer the opportunity to win a cash prize at the end of the course. There are also quite a few accelerator programs that don't offer money (and maybe even charge money for participation), but where what you learn is so valuable that it's all worth it.
Be aware that you have to set aside a lot of time in connection with an accelerator program. Many of the programs extend over several months, where you/your startup must regularly participate in events, workshops, courses, etc.
Read more and see examples of accelerator programs here.
Startup competitions, crowdfunding and entrepreneur grants
These 3 funding options go back to the previous stage: the idea/concept stage. If you can find the time for it, we strongly recommend that you also at this stage take a closer look at especially startup competitions and entrepreneur scholarships. Remember that very few distributors block you from applying more than once. The longer you have been with your company, the better off you are with many of the distributors.
Read more about these 3 funding opportunities in the blog "Part 1 : How to get funding for your startup - idea/concept stage".
This blog has been translated by Startup Central.