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Six ways to creatively fund a startup without using equity

Published By Nikeya Williams at September 4th, 2017

As an entrepreneur, raising money for your new startup business can seem hard to execute. You’ve probably seen that there are dozens of competition funds out there that provide you with the chances to secure funding. Ultimately, you want funding for your startup to come from investors, but getting investors can be impossible for a new startup.

Using your equity might seem like the best idea to fund your business as you wait for investors to come. Most new startup business owners, fall prey to taking out the equity to fund the business before the revenue starts rolling in. You don’t have to take out equity to fund your startup, there’s no law that says that you have to do that. The success of your business solely comes from the decisions that you’ll make as the business owner.

Here are some ways that you can creatively make money for your new startup without taking out of your equity:

Use Kickstarter: There’s a method to the madness in using Kickstart to fund your startup. First, you want to make sure that you do your research before pitching your idea to Kickstarter. One way to do that is to find out if there’s another project they have approved like your startup. That way, if they deny your idea, you can refer to the projects that they have approved that are similar to your project. Another tip that you’ll want to remember is when you ask for money from Kickstarter, you’ll want to be realistic and ask for money that will help you survive for a few months. Don’t forget to spread the word to your friends and family asking them to help fund your start up.

Put your Money in First: When you first start out, you’ll have to tap into your own saving accounts, home equity, retirement accounts, etc. This might seem a bit risky, but you’ll have to invest into your own startup venture before you expect other investors to put money into it. Most investors will want to see that the owners of the business have invested some of their own cash in the business to show confidence.

Find a Partner that’s willing to foot the bill:  It’s great when you can find a supplier, distributor, or customer that’s willing to put a significant amount of money into your business to help you pay for some your major bills up front.

Paying as You Go: Earning revenue and managing every dime like it was a dollar is the best way to stretch your company’s financial resources. Bootstrapping in the beginning of starting your business makes it easier to follow your path to raise capital.

 Here are some ways that you can bootstrap to build more financial resources:  

Share office services and equipment: You’ll probably need to get a co-work space where you can share the office space and equipment with other business owners.This will help you cut the cost of renting an office space and paying the high monthly rent.

Use the computers and servers you have: Don’t go out and buy new equipment when you start your startup, use the computers, software, and desks, etc, that you already have. You don’t want to spend extra money on renting new equipment.

Negotiate fees and terms with all service providers and suppliers: To keep the cost down on all service providers and suppliers, you’ll have to negotiate your fees and terms in the beginning of the agreement.

Pursue non-dilutive capital: Look for government grants that will help you get more money for your startup. Cities and states have grant programs that offer low-interest rates on loans. Having access to these resources give startups the ability to qualify for large sums of money.

Match capital to milestones: As you know that too much capital is bad as too little. You’ll want to make sure that your capital is a direct match to how your business is growing. Moreover, keeping your capital balanced gives your startup more equity.

Raising money for your startup or new business venture might feel a little overwhelming. It takes time to build up funds to start a new business. But you don’t have to feel that you have to use your equity to fund your new business. There are so many other ways you can find money to help your business grow. Don’t get focused on making quick money, think about the long-term growth of your company, and how your decisions today will affect your company’s finances in the future. Develop a plan to find money from different resources before using your company’s equity.

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