Traditionally startups use angel investors and venture capital firms as their sources of funding. However, there is alternative funding for startups.
Seedrs and Kickstarter are examples. Please search our Blog Posts for crowdfunding to find 10 posts on crowdfunding.
US Government agencies EU government agencies and EU Country government agencies and other government’s agencies offer grants and various other types of funding to startups.
Peer-to-Peer Lending Networks
One choice is peer-to-peer lending networks. These facilitate lending transactions between individuals. Examples are Funding Circle , Lending Club , Prosper and Zopa
Friends, Family and Fools (FFF)
Friends and family usually fund the first few tens of thousands of dollars for a startup. However they may be able to completely fund the startup depending on its needs. Virgin Money is one site that can help you formalize investments with friends and family
Savings and Retirement Funds
Savings can be used to fund a startup. In some situations the US ERISA legislation will allow use of IRA or 401(k) retirement funds without penalties for early withdrawal. Guidant Financial facilitates entrepreneurial solutions using IRA/401(k) Business Financing SBA Loans personal portfolio loans unsecured loans and equipment leasing.
If you are purchasing a startup or small business then seller financing is one possibility. Biz Buy Sell is a marketplace that has facilitated more than 100,000 business sales. In some cases there is seller financing available.
First Enterprise Business Agency (FEBA)
First Enterprise Business Agency is a UK regional lending alternative supported by the European Regional Development Fund
There are numerous micro-loan programs around the world. In the US one source is the SBA
Small Business Loans
Small business loans are available from a number of sources including Kabbage , Bank of America and Wells Fargo
Business accelerators usually provide access to funding. One example is Collider
Please do a search on alternative funding. If you are in the UK please see also Alternative business Funding
This is such a great reminder to us to think out side of the box when we are investigating funding. Many people I know start and stop with Kickstarter when that model doesn’t always work and isn’t always best for every business. I am currently investigating peer to peer, because I have heard the ads and the hype and trying to find out if this will work for what I’m trying to do. Thanks for the advice!
I am glad that you found this Post to be useful.
Kickstarter is now very popular not just because of how you can earn from it but on how it can literally help you in starting your business as long as you have a very good idea and a dedicated team behind it. I don’t mind using them again for another project because it has a vast audience in the internet that’s why the opportunity of getting someone to invest is endless.