Raising money for a haunted house startup during these economic times is seems to be the number one obstacle for enthusiastic haunters. Keep in mind it is just that an obstacle. Do not let it become your dead end, there are many ways around it so remember this is not an impossible task. Here we will discuss some of the various options that are out there and give you some tips to overcome your financing issues for your haunted house.
There are a couple different things a haunter can do to get funding for a new haunted house. There are several things that can be done to get yourself in front of some prospective investors and to get them to hand over the money you need.
There are several different types of investors out there. When it comes down to it all the investors can be grouped into one of three groups. Friendly investors, hobby angels and professional investors are the three groups. A friendly investor is someone you probably know personally such as friends and family and are the easiest to get in front of but approach from a business perspective. Hobby angels are professionals themselves but have money to invest as an individual investor. Finally you have your professional investors which include venture capitalists, angel investors and your local bank. Professional investors are all about the numbers and economics of your business and whether they understand or like it they still have to consider the business idea.
Your first step should be to create a list of potential investors. Search the haunt industry and your own network of people to get a initial list of people to pitch your haunt idea to. If you get interest from this initial list then expand it to others from there to find other potential investors that could be interested. There are cases where people got funding from dozens of investors so you don’t need just one or two you can have thirty or fifty or even more.
A key thing to do here though is keep track. Record all your contacts and their details such as contact information along with any meetings and your goals for each of them. Keep in touch with all your contacts during the process also.
Another good tip is to have a closing date. This is the date you set that you need to have the money from your investors. Make sure to hold them to this date also. If dealing with friends and family or hobby angels then a rolling close date works which is basically accepting the money investment as soon as they can get it to you. Make sure to be clear with friendly investors as to what will happen if the money is not paid back on time or at all. Friendly investors are close to you so do your best to maintain good relationships. I talked to a consultant once about friendly investors and they mentioned an option that is you put in writing that if things fall apart you will pay them back so much annually at x% interest and personally guarantee it which means you pay out of your pocket if things fail. Make sure it is within your means though.
Watch out for third parties but remember they can be of great help. Third party groups such as lending club and Prosper (affiliate) are peer lending and investing sites which can put you in contact with many other entrepreneurs and individual investors. Another option is crowd funding sites which help you collect money from various social media networks and include ProFounder and Peerbackers. But watch out because with sites like these your profile and idea is out there for everyone to see.
So here are some starting places and some ideas of various funding sources for you. I hope these help and leave a comment if you know of other useful funding sites as they pop-up everywhere on the internet these days. Don’t let financing your haunted house be your main roadblock anymore.