Bitcoin

Different Ways to Raise Funding For A Bitcoin Startup

Jp Buntinx · @http://twitter.com/jdebunt | Jan 29, 2016 | 05:42

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Starting a company in the Bitcoin world is not that hard these days. All one needs is a good idea, and a proof-of-concept to show this idea is valuable to begin with. But the biggest challenge for most startups is to raise enough funding, as day-to-day operations can be quite costly. Rather than looking for VC funding, there are other alternatives well worth exploring by Bitcoin entrepreneurs.

Also read: OpenBazaar in Depth: Interview with COO Sam Patterson

Raising The Funding For Your Bitcoin Company

When it comes to securing funding for a Bitcoin startup, venture capitalists are the preferred target. Presenting one’s case at any of the Bitcoin conferences around the world is a great way to reach an audience of potential investors, although the end results may vary slightly. Not every concept needs VC backing, though, as there are plenty of other ways to raise funds.

Crowdfunding campaigns in the Bitcoin ecosystem are not all that common just yet, although things are changing. Equity crowdfunding is a particularly interesting trend in the digital currency space these days, where companies will offer a small share of their company in exchange for funding. What makes these campaigns so interesting is how they will get a company lots of press exposure, and there is no need to hunt down individual investors.

Even though most countries around the world are still debating on whether or not they should create a regulatory framework for Bitcoin, there could be a bright future ahead. Bitcoin offers innovation, and any form of innovation should be stimulated through startup grants. It remains to be seen whether or not these perks will ever translate to Bitcoin startups, but it is an alternative form of funding to keep in mind for the future.

Angel investors are quite popular among Bitcoin entrepreneurs these days, as they offer flexible business agreements and bring a strong network of partners to the table. But at the same time, it is difficult to obtain follow-up investments from angel investors. Startup unicorns might be an exception to this rule although they are very uncommon these days.

Last but not least, there is the option of receiving a peer-to–peer loan. Keeping in mind how Bitcoin is all about the peer-to-peer transaction, this type of funding seems to be perfect for digital currency startups and entrepreneurs. These loans provide a fast way to raise capital without sacrificing equity, but they do require some form of collateral in most cases.

There Is No Wrong Approach To Secure Funding

With so many different options at the disposal of startups and entrepreneurs in the Bitcoin industry, there is no wrong way to raise funding. Every individual method has their pro’s and con’s, and cookie-cutter solutions simply do not exist. Different types of businesses will benefit from different approaches.

Raising the necessary funding to get one’s project off the ground is an important aspect of the Bitcoin business world. Just having a bright idea is not enough, as, without money, there is not much progress to be made. That being said, combining several of the options as mentioned above might yield the best results.

How would you go about raising the necessary funding for a bitcoin funding? Are the other ways that are viable as well? Let us know in the comments below!

Source: Tech In Asia

Images courtesy of Shutterstock, Catalyst Resources