How To Start A SAAS

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                                            The Basic Categories of Funding
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                                         There are two funding models for a startup: cost of equity and cost of debt. There is a third, grants and gifts, but it is less common for for-profit businesses.
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                                            Debt as a Form of Funding
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                                          Debt - A form of finance that many of us are sadly familiar with. Debt is money that must be paid back with interest over an agreed-upon period. This can take the form of a bank loan, or it can be a large sum of money saved on a credit card. The latter is probably the easiest and quickest way to raise cash, but there are reasons why it's a bad idea.
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                                         Interest rates are usually terrible, and if you don't have a lot of cash flow, you'll be carrying that burden for years. Small business loans are traditional financing options, but they are often limited by available cash flow or some form of collateral.
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                                         <b>Offering Equity in Exchange for Funding</b>
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                                         Equity, on the other hand, refers to the percentage of ownership in a company offered at the market price. That's what investors usually do. To provide equity to investors, there must be a clear perceived value or proof of concept to gain credibility.
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                                         <b>Grants and Gift Grants</b>
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                                          There are several ways to raise money for your business. by angels, venture capitalists, and private equity firms. Now, when you need funding, it will vary greatly depending on the nature and type of business. But once you realize the need for funding, ask yourself how you will get into entrepreneurship with that money. Each of the most common startup financing methods has its own costs and benefits. Let's break them down:
                                         
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                                       <h5 style="font-family: Helvetica;"><b>1. SBA Microloans</b></h5>
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                                         The US SBA microloan program (Small Business Administration) was created to make startup funding more accessible to women, minorities, and veterans. With interest rates ranging from 8% to 13% and maturities of up to six years, outside of this SBA subsidy program, getting conventional loans at these desired rates and terms is rare for brand-new businesses. There isn't any.
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                                         Additionally, SBA's microlenders are unique because the Small Business Administration deliberately selects them to face startup founders face-to-face as both mentors and lenders. (This is one of the many benefits of an SBA loan.) In this role, microcredit providers act not only as a source of funding for small business startups but also as advisors, providing business management, marketing, and ongoing financial advice.
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                                         That being said, all these desirable benefits come with a lot of competition. As a result, the process of applying for and receiving approval for an SBA microcredit program is not only difficult but also time-consuming. Applying for an SBA loan can usually take some time, and the borrower may have to go through seemingly unnecessary steps to meet the program's requirements.
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                                       <h5 style="font-family: Helvetica;"><b>2. Friends and Family</b></h5>
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                                         What if you don't qualify for one of these startup loans, but you don't want to rely solely on business credit cards to fund your startup? Go to your friends and family to fund your startup. However, if you decide to obtain this start-up capital, you will need to organize this traditionally less formal form of debt. The Minority Business Development Agency offers a helpful guide to borrowing seed capital from friends and family. So be sure to consult their advice before tackling this potentially risky form of small business startup financing.
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                                          3. Crowdfunding
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                                         Using crowdfunding platforms, you may be able to fund your business by asking large numbers of individuals to fund small business startups through small investments. Each backer's investment contributes incrementally towards your goals, so even a small contribution can help. You don't need access to accredited investors to fund your startup. Setting up a crowdfunding campaign is also a great way to get exposure for your fledgling business while raising money for it.
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                                        <b>Fair warning:</b> Crowdfunding usually doesn't generate a lot of initial capital, and campaigns can take a long time to sustain. Before choosing this option, consider whether the exposure opportunity of the crowdfunding site is worth it even if the campaign doesn't fund the business enough. If you don't hit your crowdfunding goal, you may have to bear the remaining start-up costs.
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                                         To find a satisfying medium between the two top startup funding sources, consider crowdfunding. This allows startups to sell securities to raise money from large groups. Every small investment makes for big capital, but every investment also means saying goodbye to stocks. So, keep this in mind when considering crowdfunding.
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                                          <b>4. Grants for Small Businesses</b>
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                                         Small business grants, often considered the closest thing to "free money" that a business can get, do not require repayment, unlike debt, and trading equity, unlike venture capital. Not a form of seed funding.
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                                         Although hard to find, small business grants are usually worth looking for as sources of funding for new businesses. They tend to be very industry-specific, so you'll need to carefully research your business landscape and identify your niche so that you can tailor your grant application to the grant sponsor's goals.
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                                         But there could be something that applies directly to you, from small business grants for women to small business grants for minority business owners.
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                                         <b>5. Business Lines of Credit</b>
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                                         If you are looking for a more flexible source of funding for your new business, consider a business loan. Lines of credit, often referred to as hybrids of credit cards and traditional business loans, are pools of cash with a maximum credit limit set by the lender. A line of credit can be used for almost any business purpose in any amount up to the credit limit. The biggest advantage of business loans is that you only pay interest on the amount you use at one time. So, if you have a credit limit of $30,000, but you only withdraw $10,000, you will only pay interest on the $10,000 you used.
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                                         Beyond this flexibility, the main benefits of business credit as a source of funding for startups are:
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                                         <b>a)</b> Money can be withdrawn at any time for any business purpose
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                                         <b>b)</b> Easy to use even for those who do not have perfect credit
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                                         <b>c)</b> Can be a great way to build your business credit history as a startup
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                                         <b>d)</b> Respond flexibly to fluctuations in business cash flow
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                                         For these reasons, the Business Line of Credit is a worthwhile funding source to consider for any entrepreneur seeking funding within his first year of a significant business.
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                                         When applying for a series of business credits, remember that most traditional business lenders require the applicant to have at least six months of business experience. Providing seed capital for an entirely new business is a risk many banks are unwilling to take.
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                                       <h5 style="font-family: Helvetica;"><b>6. Accelerators</b></h5>
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                                         We are now in the fast lane. If you're looking for more than a small amount of capital, and especially if you're interested in funding tech startups, accelerators are a great option to consider. Accelerators focus on driving early-stage business growth by offering short-term programs (usually 2-4 months).
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                                         These accelerators typically offer startups a great opportunity to network with other startups and mentors in the business world. Note that in fact, accelerators are often less focused on developing entrepreneurs and building the team itself than on business ideas. Accelerator applications tend to be very competitive, especially for "elite" accelerators such as TechStars and Y Combinator. These two only accept between 1% and 3% of applicants.
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                                       <h5 style="font-family: Helvetica;"><b>7. Venture Capital</b></h5>
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                                         As a start-up owner looking for a source of funding for a new venture, wouldn't it be great to start this journey debt-free? If you want to know how to finance your startup without incurring interest-bearing debt, you should consider venture capital, a form of equity financing, as your initial funding solution for your startup. In fact, if you're in the right industry (like a tech startup, for example), finding debt-free startup financing methods is pretty easy.
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                                         Venture capitalists are large investors in technology startups and often have close relationships with major technology companies. Venture capitalists can fund entire product lines, not just specific features or services. Venture capitalists may be lining up at your door, especially if you already have experience and a solid business plan. Evaluate your new venture. So be prepared to talk about these points before approaching an early-stage venture capital firm.
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                                       <h5 style="font-family: Helvetica;"><b>8. Angel Investors</b></h5>
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                                         Finding angel investors is also a great source of funding for startups and early-stage companies. Unlike venture capital financing, angel investors are typically wealthy individuals who provide working capital in exchange for ownership of a company.
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                                         Angel investments are usually sought during the early growth stages of startups. Angel investors generally don't invest as much as VCs, but they are still generous individuals who can potentially invest hundreds of thousands of dollars in your company.
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                                       <h5 style="font-family: Helvetica;"><b>9. Personal Loans for Business</b></h5>
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                                         If you're an entrepreneur with very strong personal credit, a new business idea, and peace of mind about your finances, it may be worth considering a personal loan for your business. These options have the advantage of simplicity. No hidden fees or fancy formulas, just a simple personal loan. Keep in mind that personal loans generally tend to have lower interest rates and easier repayment terms than business loans. And it could be used for nearly any purpose. However, there is a downside here — and this is important:
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                                         When you take one of these loans for your business, the lender is agreeing with you as an individual, not as your business. This means that even if disaster strikes and your transaction fails, you are still fully and personally responsible for paying off any outstanding balances.
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How To Start A SAAS

Chapter-1

Chapter-2

Chapter-3

Chapter-4

Chapter-5

Chapter-6

Chapter-7

Chapter-8

Chapter-1

Chapter-2

Chapter-3

Chapter-4

Chapter-5

Dan Lesniak

Cody Davis

Samuel Zell