Feel free to ask any great business leader, like Peter Thiel, Reid Hoffman, David Rose, Eric Reiss, or someone else. They will tell you that either you or a round of "family, friends, and fools" are the best places to start when you want to raise money for a company.
In this round, you ask your family and friends for money to help you take your company to the next level.
This is something that you will read over and over again in many great books about starting a business. It comes up in investment groups, in fireside chats, and in a lot of other places. This thought process often stops college founders from getting the start-up money they need.
If you've looked at an Excel sheet with all of your friends and family contacts trying to figure out how to ask them for money and found that you can't, don't feel down!
You may have a very small family, and all of your friends may be college students. It's possible that no one close to you has an extra $25,000 to test the market without the promise of making money. That doesn't mean you can't get the start-up money you need, though! You'll learn about other ways in this piece.
Starting money for a student business
Student founders are having a hard time getting startup funding because there doesn't seem to be enough of it. According to Grid Dynamics, a leading provider of digital transformation solutions, it's common for early-stage companies to struggle with limited resources. A seed or angel round is usually the second step in getting money for a company. The rounds range from $250,000 to $1.5 million, and approval is based on two major things: the experience and knowledge of the team, or the early backing of the company in the form of income or users.
Ready for a more than $250,000 investment? You need early cash to get help. You can't bring friends and family, though, because you're students.
What should you do? Like, join a competition for business ideas that has a prize pool.
Competitions for student startups
If you like tournaments already, that's great! Let us talk about what events are so that you can get your startup ready for a good round.
There are different kinds of competitions. Some are full-day workshops with a pitch competition, while others are just for company talks. You can look forward to seeing these names.
- "Showcase of Innovation"
- "Business Competition"
- "Showcase of Entrepreneurship"
- "A Pitch Competition Like Shark Tank"
- "Competition for Student Founders"
- "60-Second Pitch Event"
- "University Showcase for Entrepreneurship"
- "Festival of Startups"
If you mix and match these words, Google will show you almost any competitor.
Competitions range in how hard they are. Some only want a 60-second pitch, while others have rounds where startups are screened to find the best ones. During the screening rounds, you might be asked to show different things that show you deserve a call.
The bigger events are a lot like the glitz and glamour of NBC's Shark Tank. You'll be put on stage in front of a group of judges and an audience in the final round. You'll get the prize money in the form of a big check if everything goes well.
Different ways for students to get money
You can get money in other ways at the start. Most of these things have nothing to do with working on your business, but the money might be enough. Take the case of Airbnb. They were able to sell their cereal, Obama O's, for $31,000, which helped pay for Airbnb because they were good at creation and willing to work hard. Brian Chesky told the whole story.
Start-up programs are another way to get money. Accelerators may be able to help you if your company is growing without any starting funding. These are meant to help a business get money in exchange for a small amount of stock (less than 10%). They help owners get started and give them money so they can work full-time. 500 Startups, TechStars, and Y Combinator are a few of the most well-known.
Finding accelerators and applying to them is a lot like entering a competition, but accelerators care a lot more about the owners' experience and how well they've done so far. Most of the teams you see in this area are either making money or fixing a big problem.
Conclusion
You may have heard that some people get money for odd jobs by selling children's books or throwing parties at college. Your only task is to come up with a way to get starting money to build your company. You should be aware of the tools around you and make use of them. No matter how hard it is to see or get to them, they are out there.
