There are several types of startup funding available, including:
- Venture capital: This involves raising funds from venture capital firms in exchange for equity.
- Incubators and accelerators: These organisations provide funding, mentorship, and other resources to startups in exchange for equity.
- Angel investors: These are wealthy individuals who invest their own money in startups in exchange for equity.
- Friends and family: Some startups will seek funding from friends and family members to help them get off the ground.
- Self-funding or bootstrapping: This is when the founder funds the startup themselves, using personal savings or credit.
- Crowdfunding: Crowdfunding is a way to raise money from a large number of people through online platforms.
- Grants: Some startups may be eligible for grants from government agencies, foundations, or other organisations.
- Bank loans: Most major banks offer business loans for entrepreneurs.
- Venture debt: A type of debt financing typically provided by specialised lenders.
- Convertible loans: A convertible loan note (CLN or convertible note) is a short-term loan/debt that is converted into equity at an agreed later date.
It's important to note that each type of funding has its own advantages and disadvantages, and the best option for a startup may vary depending on its stage of development and the goals of the founders.
Startups looking for funding tend to go for VC investment, but there are plenty of alternative ways to get cash in the bank. From crowdfunding from your biggest supporters to finding the perfect grant, here are 10 types of funding available to startups.