10 Funding Strategies to Keep Your Business Growing

1. Bootstrapping

Bootstrapping is when you use your own funds to start your business. These funds might come from a number of sources, such as personal savings, low- or no-interest credit cards, and home equity lines of credit that are tied to your home. Once you scrape together all of the cash you have available to you, you’ll need to determine the most affordable way to launch your venture.

2. Friends and family

Chances are you’ve told your friends and family about your business idea. If they support it and want to help you out, they might offer funding. The funding can be in the form of a loan that you must repay or equity where they receive shares in your company. 

While friends and family are typically good sources of funding, there is a chance that you’ll lose their money and negatively impact your relationship with them. That’s why it’s important to put your agreement in writing and accept their funding only if you’re confident you’ll be able to pay them back.

3. Angel investors

An angel investor is typically a wealthy individual who funds promising startups at the early stages with their own money. The typical angel investor offers between $10,000 and $100,000 in funding. In exchange for an angel investor’s support, you’ll likely provide them with equity or royalties. 

To find angel investors, you can network with professionals or look into organizations such as the Angel Capital Association (ACA) and Angel Messenger Forum (AMF).

4. Venture capitalists

If you consider your business to be beyond the startup period, venture capitalists might make sense for you. Compared to angel investors, venture capitalists usually use other people’s money for investments and write checks of at least $2 million.

Also, venture capitalists are more involved and will likely become a board member and help with your operations. If you’re interested in venture capital, you can ask successful business brokers, corporate attorneys, and entrepreneurs to steer you in the right direction. Organizations like National Venture Capital Association (NVCA) can also come in handy.

5. Crowdfunding

Crowdfunding is when multiple investors come together to fund a business. The most common type of crowdfunding is known as equity crowdfunding and involves business owners selling equity in exchange for funding. 

To begin a crowdfunding campaign, use a reputable website like Kickstarter, Indiegogo, Crowd Supply, and Crowdfunder. Then, make sure you develop a clear strategy that outlines the type of investors you’d like to target, how you’re going to make your venture stand out, and what you’ll do to market your campaign.

6. Startup incubators

Startup incubators are usually nonprofit organizations that help startups and entrepreneurs succeed. Depending on the incubator, you can enjoy access to workspaces, mentorship,  training, and funding. 

While many incubators focus on tech, you can also find some that are open to all industries. If you join a startup incubator, there’s a good chance you’ll get connected to loans, grants, angel investors, and venture capitalists. Perform a basic Google search to find incubators in your local area.

7. Grants

Grants are ideal because they can provide you with small business funding but don’t need to be paid back. In most cases, grants are offered by state and federal agencies, as well as private companies. 

While it will take some time and research to find grants and apply for them, the payoff can be well worth it. If you’d like to explore grant options for your business, Grants.gov, the USDA Rural Business Development, and Economic Development Administration are all great places to start.

8. Presales

A presale is when you sell products or services you haven’t created yet. Not only can you use the profits from a presale to fund your business, but you may also gain valuable initial feedback and build a customer base. 

To succeed with a presale, you’ll need to find creative ways to get the word out there. Word-of-mouth marketing, social media marketing, and email marketing are a few strategies you can use to find people to spark interest in your presale.

9. Trade services

There are many services in which you’ll need to invest to launch your business. While you can pay for them with cash, another option is to trade your services for the services of others. For example, if you’re an expert in web design, you may offer a free website to an attorney in exchange for free legal advice. Don’t be afraid to think about your talents and use them to your advantage.

10. Business loans

Banks, credit unions, and online lenders all offer business loans to help entrepreneurs and small business owners meet their goals. Business loans should be on your radar, especially if you have good credit and are able to lock in a low interest rate and favorable terms. Keep in mind that even if you don’t have the best credit, you can qualify for bad credit startup loans, as many lenders look beyond credit score and consider other important factors (Ex: your business plan and goals).

Before you commit to a business loan, however, do your research, shop around, and prequalify to check your offers without any impact to your credit. This way you’ll be able to hone in on the best business financing solution for your specific budget and needs.