How To Raise Capital To Start Your Business

how to raise capital for a startup

How To Raise Capital To Start Your Business


As entrepreneurs, we face many hurdles in building a business from raw materials, Staffing, machinery and tools, and technology and solving the problem mentioned above requires money.

Most ideas never get to materialise physically because they lack resources. Most times, businesses and startups fail to stand the test of 5 years before they crumble. All these rely on the soul of capitalism.

What Is a Business Capital?

Capital is a kind of money needed or used to start a business. Capital can also be linked to a company’s capital assets that require large amounts of capital to finance or expand.

Capital may be employed using financial assets or generated from debt or equity financing. Typically businesses will focus on three types of business capital: working capital, equity and debt capital.

Type Of Business Capital.

According to financial experts, there are three forms of business capital, and they are.

1. Trading Capital.

Trading capital may be held by individuals or companies that perform many daily trades.

2. Working Capital

This is the capital of a business used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.

3. Equity Capital.

In finance, Equity is the ownership of assets that may be attached to debts or other liabilities. Equity capital is funds paid out by investors to a business in exchange for common or preferred stock.

4. Debt Capital.

This money is generally in loan form. Debt capital can be obtained from private sources or the government.

Capital sources may include friends, relatives, financial companies, online lenders, credit card firms, insurance firms and federal loan programs.

Debt resources can be obtained from government or private sources. Sources of capital can include friends, family, financial institutions, online lenders and banks.

This is one of the riskiest ways to raise money for your business. In this article, I will take you on a brief tour of how to raise funds for an existing or a news business.

How Do You Raise Capital For Your Business?

Most business needs time to grow, and going about seeking debt capital can kill your business because your business needs a lot of time to grow and mature. But unfortunately, debt capital does not give your business that opportunity in most cases.

1. Sell the idea.

Most entrepreneurs feel reluctant to sell out existing ideas, and in so doing, many promising ventures and solutions never become a reality. Never feels too unwilling to sell out a statement; ideas will always come. Innovators and creators always have multiple ideas in their thinking bank.

So don’t be scared to release that idea. It might just be a stepping stone to bring all other thoughts and innovations in your mind to life.

In the case of the early coca-cola days, a perfect example can be cited, the coca-cola founder John Stith Pemberton never had the idea to bottle the cola drink; the cola was then sold directly into a cup in drums not until Mississippi shop owner Joseph A. Biedenharn started bottling Coca‐Cola after he was impressed with its sales.

2. Savings.

Take it or leave it, if you follow the natural law of the 70- 30 ratio, you will have more than enough to kick start any idea you have ever dreamed of, and I mean not spending all that you have.

As an individual, it is always right to learn the ways of the tiny ants by cultivating saving habits. For example, economists and financial experts recommend you are free to spend up to 70% of your income, but you must save 30% as the case may be.

Tiny drops of water make an ocean, and you never can tell what that tiny amount can become in a short while.  Learn the ways of the ant who never spend all they have and always make sure they have something to fall back to.

3. Family And Friends.

Your family and friend could also do a lot to raise a lot of money for your startup idea or business.

Suppose your business plans postulate that you need 1 Million Naira or, let’s say, $5,000  to start a business. In that case, you can talk to 5 people to help you with 200 Thousand Naira or, better still, ten people to help you with 100 Thousand Naira or 20 people assisting you with 50 Thousand Naira as the case may be.

I know that our hands are not all equal. Still, all the same, if you cant find reasonable people amongst your family and friends to help you kick start your business by contributing in one way or the other. If you have relationship disease, I highly suggest you change your circle of friends or, better still, explore all alternatives involved in raising capital for your business.

4. Selling your liabilities/assets.

In one way or the other, most of us were privileged to own significant property or goods, either from previous purchases or inheritance. These could include houses, cars, jewellery and other business assets like stocks. So trading this off for some cash to start a business would not be wrong.

5. Marketing for commission.

Whether you agree with me or not, everyone is a salesman. We, humans, are wired to connect and reach out to people. Marketing for a commission is called affiliate marketing.

Taking up a sales job and receiving a commission is not a bad idea either, so many companies and individuals have goods that need to be sold, approach them and discuss a commission. Commodities ranging from cars and houses can be sold and used to generate high-level commissions.

If you do not have access to the commodities mentioned above, you can look for a local factory, warehouse, or industry and approach them for sales.

Here is an article I recommend you to read to help you get started with affiliate marketing.

6. Start with the idea.

There are still ways to go around getting our business idea to work even without the appropriate fund at hand.

Often, angel investors and business funds needed to sustain the business do not show up until we start something, no matter how small it may be.

There is power in starting small. You never can tell; someone somewhere needs your innovation but is just looking for a starter.

A perfect scenario can be cited with the Wright brothers, who started having the idea of aircraft to design the Airplane; they did not think of funds to build bigger planes or expand the industry; they just started with their vision.

Another example is  Colonel Harland Sanders who Started Kentucky Fried Chicken Popularly known as KFC during the great depression which took place in America in 1930, despite all economic downturns, he was able to scale KFC into a widely recognized business worldwide. Other intelligent and stress-free ways to raise capital for your business are.

7. Gratuity and seasonal benefits.

We human beings are made up of a network of other people. Somehow along the journey from childhood to adulthood, we meet and establish a new connections in relationships, either family, work or business.

We often receive seasonal benefits as a reward for our previous and past relationships.

These benefits can come in cash, kind, and suitable material benefits to help run our lives.

This can also be applied in the area of work. Most employees devote their lifetime and energy to a company they previously worked at. It is no doubt that as soon as they pen down their resignation, they are often rewarded with one benefit in Gratuity and seasonal benefits like pension and the likes.

Aspiring business owners and entrepreneurs can use these benefits to start a business independently without involving another third party.

The Gratuity of some retirees most times runs into millions. These apply to most individuals’ seasonal benefits involving cash, luxury houses, and expensive jewellery tech gadgets.

Don’t just wait for any other source for your business purpose; that channel can be utilised as a liable source for startup capital for your business.

8. Mentors and angel investors

You should know that the business world has two categories of people, the innovators and the starters.

The innovators are more of like an idealist, most time they do not always have physical cash at hand. The starters are like investors; they have the money but looking for a very profitable idea to invest in. People like Warren Buffet and Robert Kiyosaki fall under this category.

The bottom line is there are people ready to invest in your business provided it is scalable and optimistic.

You just have to be able to locate them and to raise the hopes of your business being able to receive the fund, you have to prepare a business plan.

9. Business Grants.

I will elaborate on this point because it stands as one of the surest means to get startup funds for your business without losing it.

Grants are financial aid needed for your business. Unfortunately, many African entrepreneurs are yet to understand this funding channel, let alone be able to access grants successfully; I am yet to receive any startup grant for my business.

However, I sure know people who have received grants multiple times for their business and are still collecting grants yearly for business.

There are over a thousand million local and international organisations whose primary responsibilities are to provide SMEs with bright business ideas with startup funds without any payback; YES!!! No retaliation; most people call grants free money.

So I suggest you start making your business available for grants. In recent times, many organisations and governments have engaged in regular disbursement of funds to empower Small and medium scale enterprises.

First-class nations of the world like the United States United kingdom usually allocate certain funds toward the successful running of SMEs in their economy, notwithstanding lower class nations like Nigeria and Africa have also benefited from this scheme. Grants are free, and you do not need to pay them back.

Most grant offering organisations provide entrepreneurs with nothing less than USD 5,000 for their business.

In most cases, you are not required for illicit business documents; pitch something scalable; you get funding.

Here is an article I recommend you read to help you get started with business grants.

10. Try Crowdfunding.

Crowdfunding uses small amounts of capital from many individuals to finance a new business venture.

Crowdfunding uses the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together, potentially increasing entrepreneurship by expanding the pool of investors.

There is so much to achieve with crowdfunding. For example, imagine that you’re trying to raise $1 Million for your business; you can either accomplish this funding by finding a wealthy investor who can provide all the money at once or, better still, ask over 1,000 people to give you $10 called crowdfunding.

The concept of crowdfunding is built on the principle of democratising the process of raising capital.

Rather than rely on the pool of a few wealthy investors, banks, or institutions that have deep pockets, crowdfunding allows entrepreneurs to raise the same amount of capital from a smaller group of investors, whom we may call the crowd.

11. Position Yourself for Miracles.

Dear readers, whether you agree or not, there is a supernatural dimension to this present world, and it’s high time you learn to take advantage of that; we are created in three sizes: the soul (mind), Spirit, and Body.

The creator is Spirit, and he must tap into the unlimited resources and abundance of the supernatural and learn to flow in the dimension of the heart.

Most times, we find ourselves in the pit of life without having anybody to help or assist us, and we often feel hope is lost; dear reader, it’s not a time to weep or lament; it’s a time to turn to the creator.

A lot can be achieved via the supernatural, but not everyone is willing to take that lane.

Beyond the physical world, there is a mystical dimension controlled by the creator himself. Beautiful ideas and innovations from business, tech and all other aspects make humanity what it is today generated from this realm.


Getting a startup fund for your business can be a heavy task, especially when you don’t have enough money to start.

Here is an article I recommend you read in other to help you establish your business.

If you need a guide to help you in marketing, you can read this article to help you get started.


What do you think?

Written by Udemezue John

Hello, I'm Udemezue John, a web developer and digital marketer with a passion for financial literacy.

I have always been drawn to the intersection of technology and business, and I believe that the internet offers endless opportunities for entrepreneurs and individuals alike to improve their financial well-being.

You can connect with me on Twitter


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