Creative Ways to Get Funding

All startups have one thing in common – they need money to get off the ground. As the saying goes, money makes the world go ‘round, and it’s extra true for small businesses. You know you need capital to get your new venture going, but where are you gonna get it?

When it comes to startup funding, you have a few options. Each of them comes with a laundry list of pros and cons, and there’s no single, right answer for everyone. In this session, we’ll work through each of the alternatives, do’s and don'ts, and dispel some common funding myths.

Creative ways to get funding


There are six main options for startup funding: bootstrapping, friends & family, crowdfunding, startup competitions & grants, loans, and angel investors & venture capitalists. Which option is best for you will depend on your funding needs, the type of business you’re in, and a lot of personal preference.

You’ll want to do thorough research to ensure you’re picking the funding method that will work best for you and your business in the long run. To start, we’ll discuss pros and cons of each, as well as some next steps to get going.


Bootstrapping is essentially just self-funding – you use your own capital to get the business going. This method has been growing during recent years, particularly because the costs to start a new business are lower than ever. As many as 82% of today’s startups are self-funded.



Where to Start

Step 1: Do your research, crunch the numbers, and decide how much risk you’re comfortable with. Bootstrapping doesn’t mean you have to empty your entire life savings. You can, or you can get started with a lesser amount that you’re more comfortable risking.

Step 2: Talk to entrepreneurs who’ve done it. Find out what worked for them, what didn’t, and the advice they’ve picked up along the way. You can find fellow small biz owners through your local SCORE or Chamber of Commerce, as well as online.

Step 3: Before you take the leap, consider starting your business as a side gig. You’ll keep the cash flowing in from your day job while you test your product and conduct the due diligence to ensure your idea can be successful.

Friends and Family

If bootstrapping just isn’t producing the kind of capital you need, you can sometimes turn to family and friends to help fund your startup. They know your passion and your drive, so there’s no one in the world more ready to support you.



Where to Start

Step 1: Weigh the pros and cons. Take into consideration both the tangible and intangible consequences of accepting money from family & friends (e.g. complicating relationships, blurring the work/life line, tax implications, etc.)

Step 2: Design a pitch specifically for your loved ones. Stay away from any business-speak they may not be familiar with, be reasonable with your ask, and don’t try to hard sell your family. The arrangement can quickly turn ugly if people feel bullied into giving you money.

Step 3: Take your idea to the audience. Do everything you can to make them as comfortable as possible – encourage loved ones to ask for clarification, avoid making them feel any pressure to put up money, and be open to getting nonmonetary help


Crowdfunding is basically taking the friends & family concept to a mass audience. You’ll collect donations, presales, loans, and/or investment from anyone on the internet. Crowdfunding is relatively new and still evolving, but it’s popularity has exploded in recent years.



Where to Start

Step 1: Determine what your funding needs are. If they’re super high or low, you may have better options than crowdfunding. Decide what kind of funding you’ll do – do you want to accept donations, presales, loans, investments, or a combination?

Step 2: Research the different sites you can use, including:

Take into consideration your funding needs, the nature of your project, and what kind of funding you want to do to determine which platform will work best for you.

Step 3: Set about creating a campaign. Do plenty of research on who your audience is and what will speak to them. Then craft a pitch that will entice people to put up their own money. Remember – you can do more than one round of crowdfunding, so take note of any key lessons.

Startup Competitions and Grants

You probably won’t be funding your entire venture through competition prize money, but there are a ton of competitions and grants offering up some notable cash. Startups competitions also give you access to in-kind prizes, critiques of your pitch or business plan, and free publicity.



Where to Start

Step 1: Decide whether you want to pursue a startup competition or a small business grant. You can find out about startup competitions in our guide and search federal grants here. Do some research to see which competitions or grants fit well with your business.

Step 2: Get started with the necessary due diligence. If you choose a competition, research the application process and perfect your pitch and business plan. For grants – especially federal grants – the application process can be extensive, so it’s best to get a head start.

Step 3: Remember, competition is tough for both startup competitions and small business grants – don’t be discouraged if you don’t get the first one you apply for. Keep plugging away and success will happen.


Loans are pretty common among startups with up to 41% of small businesses funded through this method. The primary drawback is that you’re incurring debt, which you’ll eventually have to pay off. But if you’re willing to take the risk, a small business loan is a great option.



Where to Start

Step 1: As always, do some research. Take a look at several banks and other lending institutions to determine which has the best terms, interest rates, etc. These can vary greatly between institutions so it’s important to research more than a few options.

Step 2: Reach out to one or a few lenders that look promising and find out what it takes to apply. If you need a business plan, ask what specifically to include. You can even ask about what kinds of businesses they’ve lent to.

Step 3: Set about preparing for the application process. If you don’t have a business plan, write one. If you do, perfect it. Craft your pitch and elevator pitch, and practice in front of an audience. Do everything you can to be as prepared as possible when the time comes.

Angel Investors and Venture Capitalists

Creative ways to get funding angel investors

It’s simple – VCs provide a sizable sum of capital in exchange for an (also sizable) chunk of equity. While these two methods are less common – fewer than 1% of startups secure venture investment – it can be a great option if you need a large amount of money to get going.



Where to Start

Step 1: Do your research, then do some more. The biggest threat to venture capital is when you and your investor have misaligned goals. There are enough options when it comes to investors that you can afford to be picky until you find someone who believes in your vision.

Step 2: Consider launching your business before approaching investors. If you can show sales, paying customers, and profits before you get seed capital, investors will be much more willing to fork over their own money.

Step 3: Get prepared. Perfect your business plan, crunch your numbers, and practice your pitch until it’s flawless. The key with investors is to be straightforward and compelling. They’re experienced enough to see through BS, and you need to earn their trust to get at their wallets.


Keeping a few simple best practices in mind during your funding search can streamline the process and ensure the best possible result for you and your business. Do…


Likewise, there are a few things you should steer clear of in order to be as successful as possible throughout the funding process. Don’t…

Common Funding Myths Debunked

With all that’s said and written about startup funding, there are some common misconceptions and myths that have evolved. In this section we’ll debunk some of the most prevalent myths, and tell you the real story.

Getting Funded = Success

Many founders think that money will magically build a successful company by itself. Not so. The truth is that money is a tool. When it’s wielded correctly – and combined with a good product, great strategy, and dedicated team – it can help a capable startup make things happen.

All Investors Have Your Company's Best Interest At Heart

There are plenty of investors and venture capitalists who truly want to help you build a winning business, but some are only interested in the pay day. These people will often ask for a huge chunk of equity or restrictive royalty deals. Ample research can help you avoid these guys.

Federal Grants Are "Free Money"

It’s true that federal grants don’t have to be paid back, but they do come with limitations. If you’re issued a grant for a specific purpose, you won’t have the flexibility to pivot if that idea doesn’t work out.

You Need Perfect Credit To Get A Small Business Loan

Having good credit will certainly help you get an SBA loan, but it’s not the only factor that lenders care about. If you have a winning business plan and a killer pitch, you can still get a loan with less than perfect credit (you may have to put up additional collateral to compensate).

Banks Are The Only Place To Get A Loan

Just because a bank has turned you down for a small business loan, doesn’t mean you’re out of luck. You can also look to the Small Business Administration, credit unions, and individuals or small companies.


There’s no one right answer when it comes to startup funding. By now, you should have a grasp on which method(s) is right for you and your business. Now it’s time to take what you’ve learned and get that money.

Here are a few resources to help you along the way:

Talk about this lesson