No need to hesitate. 5 patterns of fundraising methods.

This is a story about how to raise funds. Surprisingly, it seems many people don't know about it. That said, I also didn't know anything about it before, so I completely understand how they feel. No one tells you how to raise money, after all. So, for now, I'll introduce some classic fundraising methods. If you ever need money for something you're planning to start, please give them a try.

Loans from financial institutions.

This is the first classic method. You go to a bank, explain your business, and ask for a loan. However, usually, the person at the counter is an old man or someone without much knowledge, so rather than focusing on the interesting aspects of the service, they tend to prioritize the system, giving the impression that they are honestly looking at things from a perspective that is more than a generation behind.

If you think about it, for example, if you talk about an unknown IT service, the old man at the counter will probably be like, 'What are you even talking about?' It can't be helped. Basically, the recent trend seems to be that more people are considering investments based on the potential of the service and human character rather than the system, but I don't think that will change for general banks for a while.

However, the Japan Finance Corporation was quite a challenger. I've also received a loan from them, and it seems they are surprisingly willing to lend if the business is interesting or if it's a business that promotes the role of the country. I think it depends on the person, but I felt that the person in charge had a pretty deep understanding.

By the way, a loan is basically a debt. It's money that must be repaid. So, please be aware that you will have to repay it with interest over several years. Money that doesn't have to be repaid is an investment. Well, saying 'doesn't have to be repaid' might be a bit misleading. If you already have a business plan in front of you, please take it with you.

Investment from individual investors and venture capitalists.

And then, investment. Wealthy investors provide money for future entrepreneurs and companies. However, in reality, it's mostly about the investors holding shares in your company. If it's a good investor, they will join the management team and participate in the business themselves. They might even nurture new entrepreneurs who don't know left from right, from within. However, there are also investors who are purely business-like and only provide money.

Basically, someone who will work on your business together with you, like a partner you can talk to about anything, is probably the most suitable type of investor. Especially if you have little experience and are considering investment at an early stage.

Only a small number of investors provide money to venture companies at the startup, immediate post-launch, or early stages. This is because investors generally see a large return when the company goes public or when it's sold in a buyout. The value of shares held in the initial stages becomes tens or hundreds of times greater during an IPO or buyout, so the difference becomes a large profit. The reason why entrepreneurs can earn a lot is basically the same.

By the way, an 'investor' usually refers to an individual who takes risks, but sometimes investments are made by companies. These are venture capitalists. Venture capitalists invest in companies that have the potential to go public or be acquired in the future, and they often support the company as an organization. Incidentally, if a company is about to fail, they might even bring in talented management personnel.

Recently, many forms also serve as entrepreneur training. They are called seed accelerators. The training institution called Y Combinator is famous. It's a program started by a super talented entrepreneur named Paul Graham, and Dropbox and Airbnb are from Y Combinator. If you are proficient in English and interested in starting a business, you might want to give it a try. Therefore, investment is one of the means to raise large funds.

This is about actual services and products rather than business plans. Try to finish your service or product to a functional mock-up (temporary stage) and then present it. If it's an attractive product or service, it will surely move investors.

Use a crowdfunding service.

If you only have a plan, search for it on an internet crowdfunding service. By publishing your plan, people who like it will invest in it from small amounts. It's an investment from the general public. In return, the planner writes what they can give back. Usually, it seems they send the finished product.

In particular, users who become investors directly convey market reactions. If it gains momentum, it also becomes part of the promotion. There's also an image of the product's purchase price being included in the investment amount, as if customers are pre-purchasing the product.

Globally, sites like Kickstarter are famous. They have even achieved large-scale fundraising of up to 20 million dollars. In Japan, RADYFOR and CAMPFIRE might be well-known. If you are confident in your own project, please try using them. You might be able to successfully raise funds quickly.

Persuade friends, family, and supporters to donate or invest.

I haven't done it myself, but it seems quite common. Anyway, persuade family, friends, and supporters to gather funds. There isn't specific advice on how to do this, but perhaps your personal charm and potential directly translate into funds.

Of course, if there are people who can properly see the business's potential, they will donate after understanding its value, but fundamentally, I feel it comes down to the person's character. In any case, have trustworthiness and a charm that draws people in. Though, I feel it's not something you can easily acquire just by trying.

Earn it yourself

All things considered, this is probably the most freeing option. Receiving investment boosts business speed, but it doesn't necessarily mean you can manage freely. However, investors also nurture entrepreneurs, so the meaning will vary depending on each style.

Now, if you're earning it yourself, there are some tips.

First, focus on how to sell your abilities, experience, technology, skills, and knowledge at a high price and recover quickly. For example, let's say you have cooking experience. In that case, why not try running a cooking class? Then, think of the highest possible price and service content, find customers, and collect payment upfront. If you can do this, you'll gather funds quickly.

If you know something or are good at something, use that as your weapon. By offering your knowledge, are there people you can help or empower? Target those people and devise a service where you can sell your knowledge at a reasonably high price. After that, just like before, you just need to acquire customers.

By the way, service industries tend to have low risk and quick monetization, all things considered. While purchasing goods requires upfront investment, in a service industry, what you possess directly translates into money.

Many people may have heard the saying, 'start small,' but there are surprisingly many people looking for what you know and what you can do. Initially, turn what you can do into money, and gradually accumulate enough funds to invest in the business you truly want to pursue.

Summary

For now, I've proposed 5 patterns, and I wonder if you've grasped any hints. Rather, I believe the fundraising methods currently being properly implemented fall into these 5 patterns. Beyond that, some people earn money through casinos, and others through stocks. However, both casinos and stocks, of course, require initial investment, and I think they are advanced fundraising methods that cannot be mastered without thorough research. Despite this, I wonder if beginners find them easy to get into. I'm also studying stocks now, but it's quite difficult. It seems it will take time to get a feel for it.

Therefore, first, as a classic approach, thoroughly refine your business plan, conduct good business, and secure investments or loans from investors, or perhaps try developing your business with your own funds. You will gain vast experience and intuition. If you can succeed in business, even if you have nothing around you, you can acquire the knack of earning from scratch anytime, anywhere, just with your mind.

By the way, if you simply want to become rich, I think it's best to join a good company and climb the corporate ladder. You don't necessarily have to take risks; if you work hard at a good company, you can earn a decent amount of money. However, if you have an idea that you can't help but realize, for example, if you want to create something for society, or if there's something you want to change, then please, give it a try. Surely, with that passion, some kind of solution will follow.