Start-Ups in Canada
Startups are the rage right now. They are popping up everywhere with immense speed and are projected to expand even more than they have now. Startups are the result of a psyche developing amongst the current generation of being their own boss.
Most of the youth nowadays derides the corporate structure and instead wish to create their own businesses and be their own boss. They wish to be answerable to no other person and view the existing structure with contempt. Many executives who started with startups are hailed as pioneers of the current economic world and are the influence for all the people moving towards startups.
What is a Start-Up?
A startup is essentially an entrepreneurial venture that seeks to create an economic opportunity in a pre-existing environment that presents the opportunity. A startup is often based around an inventive product or service and tries to use the product or service to create a fast-growing business that looks to expand quickly in the marketplace. Although it involves a lot of risks, the chance of success and rapid growth attracts many people towards startups and one can see startups pop all over Canada because of that.
A unique idea may be the most important thing for a startup, but no startup can start without some money. Indeed, much like every other business, a startup needs some money to kickoff. You might have seen people ask for money on websites like Kickstarter, and that is one of the kinds of financing for startups.
A startup in Canada can be funded in a number of different ways, not just online. Let us have a look at the different loans for a startup business.
Different Ways to Gather Startup Investment
There are a number of different ways to finance a startup, here are the ones are commonly seen in Canada:
Personal Investment
The person who comes up with the idea invests his or her own money in this specific case. This can be done either through money the person may have or through collateral on their assets. Personal investments are an indication of the person’s commitment to their idea and to the project. It also exhibits the entrepreneurial trait of taking on major risks in order to reap some great rewards in the future. Personal investments work very well to show future investors and other corporations the serious intent of the entrepreneur.
Love Money
This kind of loan is commonly taken from people in close relation to the entrepreneur. They can be the spouse, the family, or some very close friends or associates. However, anyone looking for this kind of loan should be aware of the risks involved. Family and friends cannot be taken lightly since they might want a part in the business and can be demanding. Furthermore, family and friends normally do not have a lot of money to support you.
Venture Capital
Venture capitalists often look for fast-growing businesses that they can invest in. Such capital is not necessary for a startup since not all startups are supposed to expand or grow at great rates. Venture capitalists also look for high returns on their investment and you need to make sure they are familiar with what they are getting. Furthermore, venture capitalists can have a lot of input in the startup and the business. Therefore, look for a venture capital firm that brings a lot of expertise and experience along with the money.
Angels
Angels are retired business executives or major estate owners that essentially invest in smaller firms as their major source of income. They invest in firms directly and require supervision of the management process.
Government Grants
Frequently, the Canadian government might step in to help people with their startups. For this, the startup needs to match the criteria set by the government. The government checks everything about the idea and its usefulness to the community and the country. If after a thorough look at everything, your startup ideas matches all necessary criteria, the government grants some funds to the startup in order for it to work and grow.
Private Lenders
Private loan lenders are another way to finance a startup. Such lenders often have their own incentives in mind while giving entrepreneurs the money to start off their businesses. You need to be careful with the lender you are borrowing the money from and their policies, especially how they may affect your business. Try to look for investment from a lender that has not only a good reputation but also a good credit history. These two factors can decide the future of your business and your happiness, so be extra careful with them while looking for private lenders.