How To Secure Funding For Your Texas Startup

Coming up with the next great business is only the first step in building a company from the ground up. The reality is that you may need funding to make your dream a reality. The good news is that there are several ways to secure funding for your Texas startup.

Some choose to go the traditional route and seek funding from a bank. Others might seek out investors or apply for a loan from a credit union. You might also have less common options like equity crowdfunding or grants. Here are some of our top suggestions for securing the financing you need, as recommended by our business formation lawyer.

Traditional Loans

Arguably, the most common way to find funding for your company is through traditional loans from banks or credit unions. These small business loans come with a plan for you to pay back the money you borrowed over time. The lending institutions will also charge interest, which can add up. There is no guarantee that a lender will agree to a loan for a startup as they are considered on a case-by-case basis.

Small Business Grants

Grants differ from loans in that they involve money that is not required to be paid back. Some of these grants are backed by the government, including the Texas Workforce Commision’s Skills for Small Business Program, which is designed to help companies invest in hiring full-time employees. While this money does not generally have to be paid back, there are usually strings attached. Each grant typically conditions the money based on specific requirements, like hiring Texas residents to full-time positions.

Venture Capital

The whole purpose of the venture capital industry is to identify promising startups and provide them with the funding they need to succeed. These investments usually have terms that spell out when the venture capitalists expect to see a return on investment. Some agreements might also include the sale of equity.

Equity Crowdfunding

When you hear the word “Crowdfunding,” you might think of campaigns on Kickstarter or Indigogo that are designed to launch a new board game or golf shoe. Equity crowdfunding is different in that it offers investors ownership shares instead of rewards. Instead of pitching your business to venture capitalists, you can share small company shares directly through these platforms. This allows you to secure funding without debt, but it comes at the cost of equity in your startup.

Starting Your Own Business? Call J Nichols Law, PLLC Today

These are only a few ways to fund your business in the early days. If you are planning to start a new venture, you could benefit from the counsel of an experienced legal professional. Every startup faces unique challenges, and our firm is prepared to help you navigate each of them. To schedule a consultation, call us today at 409-257-7878 or contact us online.