by Ordering on Jan 19, 2022 10:58:46 AM
It would be best to raise cash from different sources to begin an online marketplace platform.
Raising money has never been easy; in fact, everyone who knows you sticks around when you don’t need things or have something to give, but few contribute when you need and urgently want funds to pursue your next venture in life.
Starting is never easy, and not everyone likes the idea of fronting the bank for a considerable loan. However, it is not impossible to source funds to fund your venture; you need to know how to where you need to look for funds.
One-third of all startups and new ventures fail because of their lack of funds; taking this information, you should understand that a lean startup is a way to go.
It is a whole different approach when it comes to achieving your goal.
You can add things on a marketplace and allow customers the chance to add feedback to improve the product time and time again.
The funding gets divided into many different stages when developing a lean business. It requires you to have a continuous roll of innovative ideas that can be implemented.
What Is Bootstrapping?
Have you heard of the term bootstrapping? While it is an excellent method to get cash fast, it is not the best way to ensure that you have a financially secured future.
It is a term used to describe when people use their finances to pay for a startup. They also find outside investors to contribute.
The business can begin as a SaaS project and then get more and more organic clients to earn more cash to inject into the venture.
The issue with bootstrapping is that it can easily lead to burnout. That is a term used to describe when your finances are low and you cannot get your hands on the revenue needed to carry on.
See, when you experiment with ideas, you don’t know if they will work. No one can predict the future. If you spend a large amount of capital on monetary success, you will experience burnout.
It is a very high-risk method of obtaining cash for an online marketplace platform, and you shouldn’t rely on this mode alone.
Crowdfunding
Now, this is a great idea to go with. It is the terminology used to describe the practice of raising funds via a community-based venture. First, you will have to run a marketing campaign that promotes your online marketplace idea and get people to buy into the concept.
Then, you will have to ask people to fund it for you. There are now a lot of platforms online that offer you the chance to get crowdfunding for your online venture.
IndieGogo is one of them. It is a platform that works around the idea that they are the runner of all crowdfunding platforms.
It has based its model around offering two types of funding options. Flexible and fixed. If you go for a static method, you must meet the overall goal and begin your venture.
If you do not reach the target goal, your donor will receive all the investment and your business concept. Flexible funding doesn’t enable such a commitment, though.
Kickstarter is a powerful platform for crowdfunding, and it has been helping entrepreneurs to begin their ideas since 2009. As a result, they have successfully raised over 5 billion USD.
Rockethub: Now, this is a global network of entrepreneurs you can connect with and attract to your business idea. In addition, they have a popular blog where you can reach consumers and read new ideas that may work for your online marketplace platform.
Venture Capital Funding
Now, this mode of raising cash should not be ruled out either. This is an equity-based way to raise funds, and it allows you to get higher returns and considerable earning potential.
A firm specializing in venture capital will explore all of the equity-based fundraisings. In return, they will invest in your online marketing platform for a higher return than what they invested and a long-term earning potential.
You don’t have to pay fees to the investor for this type of funding. However, the downside is if you are successful, you will owe a hefty fee back to the investor and always have to pay them commissions if you don’t set a formal contract in place.
Of course, if you earn a lot anyway, this will be a minimal amount compared to what they have invested and what you will make. Therefore, it is crucial to read between the lines before agreeing to anything.
There are other fundraising methods, but you need to be sure that you do your calculations well before entering into any one way you research.
Then, if you are ready to start raising funds, do so wisely and don’t give up on your idea to open up your online marketplace platform.
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