Bartering: A Non-conventional yet Effective way of Fundraising for Business Startup

In my last submission on business financing, I had talked about bootstrapping with emphasis on blockchain powered blogging. We cannot overemphasize the truth that every novel idea needs funding to become tangible. Where funding is lacking, the entrepreneur becomes incapacitated to give solution to life's problems.

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While there are many other sources of startup funding for entrepreneurs and idea strategists, the focus of this blog would be on "Barter". The term Barter is native to trade and is used as a system of exchange where participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money.^source

Bartering which may be closely likened to currency system of trade prioritizes the exchange of goods and services for other goods and/or services. In battering, money (whether paper or coin) is never considered as having value. Bartering, which derives its origin from Mesopotamia tribes, dates all the way back to 6000 BC. Early adopters were Phoenicians while the Babylonian's improved upon the trade system later on.

Put in simple terms, bartering means if I have cassava in a substantial quantity whereas I need Rice; I'll have to go look for the fellow who has rice but needs cassava. We both agree upon the terms of the exchange of the two products bearing in mind that they have different value. When the transaction is successfully brokered, then bartering just occurred.

How can Bartering be maximized to fund-raise for Business Startup?

For my understanding of fundraising for business startup, this, to me seems to be one of the easiest way of getting huge capital. In this case, we have to understand that the capital may not actually be in monetary form, rather, a crucial need would be solved without spending a penny.

I know of an entrepreneur who wanted to get started his Public speaking career. He needed a 300-seater auditorium for his debut presentation but couldn't afford the pay. He made an offer to the firm that owned the facility to train their staff for free on Customer service. The fee for the training was equivalent to the cost of renting the facility for his first Public speaking presentation.

He was good at his work and the deal was sealed. After two weeks of training the staff of the company, he secured the facility for free to make his debut presentation which earned him his first million. That's how cheap it is to earn funding from bartering.

When Bartering, Risk what You can afford to lose

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While bartering is an easy way for a startup to get funded, the promise for the exchange of goods and services is built on the premise of trust in content. It is advisable to always risk giving what one can afford to lose.

By implication, an entrepreneur must not promise to render a service in exchange for another (free) service when his competency has not been measured and proven strong enough. This is to ensure that trust is built for future possible transactions or referrals that may boost sales in the favour of the entrepreneur.

What other way can an entrepreneur raise funds by Bartering?