Don’t let limited cash stop you from pursuing your dream.
If you want to start your own business but don’t have the funding yet, there are practical ways to get it off the ground—without wasting time or taking on the wrong kind of risk.
As entrepreneurs, we admire anyone willing to build something from scratch.
It’s not easy.
In the United States, roughly half of small businesses make it to year five, and about a third reach year ten. The odds are real—but so is the upside.
Furthermore, just 35% of those businesses make it through ten years.
Failure is more common than success in the early stages—but preparation tips the scales.
So we commend you for choosing this path.
While building a startup is demanding, it’s also incredibly rewarding.
You’ll learn fast. There are plenty of things we wish we knew before starting our first company.
But first, you need to get your idea off the ground.
Like most things in business, that requires some money—or at least access to it when you need it.
If you’ve never raised or cobbled together capital before, it can feel intimidating.
Not sure where to start?
There’s no single right answer.
You can combine multiple sources and phases of funding as you grow.
Use the guide below to choose the best options for your business stage and goals.
4 Steps to Get Your Startup Funded
Follow the steps below to secure funding intelligently—and set yourself up to use it well:
- Create a detailed business plan
- Explore your funding options
- Look for a strategic partner
- Try to minimize initial business costs
Step 1 – Create a Detailed Business Plan
Before anything else, get crystal clear on how the business will work. Your plan isn’t a term paper—it’s a decision and execution tool.
A strong business plan increases your odds of raising money because it proves you’ve thought through the model. Writing it forces you to stress-test assumptions so you can answer investor and lender questions without scrambling.
Companies with well-structured plans tend to grow faster because the team has a shared map.
Here’s why this matters.
It’s tough to raise money without a plan. You can use a business plan template to get started.
Investors and lenders will want to see financial projections, your path to customers, and what milestones the money will unlock.
Your plan also anchors day-to-day execution. When things get busy, you can refer back to it for priorities and tradeoffs.
Don’t rely on memory. Document the core of your strategy so six, twelve, and twenty-four months from now you’re not guessing what “good” looked like.
Your business plan should clearly explain your company and the problem you solve.
Who are you?
What exactly do you do—and for whom?
Include a brief market analysis.
Summarize your competitors, how you’re different, and the size of the opportunity. Define your ideal customer profile (ICP) and how you’ll reach them.
Outline your organizational structure.
Clarify roles for founders and early hires. Decide who owns sales, marketing, product, operations, and finance—so nothing mission-critical slips through the cracks.
Dial in the financials.
Project revenue, expenses, headcount, and cash flow for the next three to five years. Identify your break-even point, expected runway, and funding milestones.
If you have a finance-savvy friend, get a second set of eyes on your model and sanity-check assumptions like pricing, gross margin, and customer acquisition cost.
Keep projections realistic.
You don’t need to show day-one profits. You do need to show a believable path to traction, margins, and sustainability.
Finally, make your “data room” simple: one place with your plan, financials, customer proof (letters of intent, preorders, pilots), and key documents. This shortens diligence and builds trust.
This plan—and the clarity it creates—will help you secure funding from the sources below.
Step 2 – Explore Your Funding Options
There are many ways to finance a startup. Mix and match based on your stage, risk tolerance, and how quickly you need to move. Here are the most common—and how to use them well:
Visit your local bank or an online company
Start with the bank you already use or reputable online lenders. Ask about business term loans, lines of credit, and equipment financing.
Schedule time with a loan officer. Bring your plan, projections, and any proof of revenue or signed purchase orders.
You may qualify for financing tied to specific needs (e.g., equipment) or a revolving line for working capital.
If a business loan is denied, explore a personal line of credit only if you fully understand the risks and have a clear repayment plan.
Compare multiple institutions—terms vary widely. Look beyond rate: weigh fees, collateral, covenants, and prepayment penalties.
Venture capitalists (VCs)
You can also secure funds from venture capitalists.
VCs invest in high-growth companies in exchange for equity. Expect diligence on market size, team, traction, and unit economics.
Equity dilution isn’t automatically bad—strong partners bring networks, talent, and follow-on capital.
Know the tradeoff: VCs optimize for outsized returns within a fund timeline. They expect rapid progress toward scale.
VCs typically favor software, technology, and other scalable models. If your company is capital-intensive or primarily local (say, a single restaurant), standard VC may not fit.
If you pursue VC, define your round (pre-seed, seed, Series A), your milestone plan for the next 12–18 months, and exactly how the funds get you there.
Angel investors
Angels are individuals who invest their own money. They may take equity or use a convertible note/SAFE that turns into equity later—often with a discount or valuation cap.
Many angels are current or former founders. Beyond capital, the right angel can be a force multiplier for advice, talent, and early customers.
Angels often invest earlier than VCs and can decide quickly. Have a concise pitch, clear use of funds, and a simple way for them to say “yes.”
Practice your story. A 30–45 minute meeting over coffee can be enough to secure a commitment if your plan is tight and the fit is right.
Crowdfunding
Use online platforms to raise capital from a broad audience.
Rewards-based crowdfunding lets you pre-sell a product or offer perks; equity crowdfunding allows backers to invest for a stake in the company.
While most people think of Kickstarter when it comes to these platforms, there are other sites to consider as well.
Here are a few popular choices for startup companies:
Most sites operate similarly: you publish your pitch, set a goal, and drive traffic. Some focus on accredited investors, others on the general public.
With a compelling story and strong promotion, you can raise meaningful capital—and validate demand before you scale.
Here’s a classic example.
In 2012, a company called Oculus Rift launched a campaign on Kickstarter with a goal of $250,000.
The company aimed to produce virtual reality headsets.
They ended up raising $2.4 million dollars, nearly ten times their goal.
That funding fueled rapid growth.
Just two years later, Facebook bought Oculus for $2 billion.
Crowdfunding isn’t just for hobby projects—serious companies have used it to launch.
But big raises don’t guarantee success.
Pebble Watches raised over $10 million in 2012, far exceeding its $100,000 goal.
But a crowded market and fierce competition made long-term survival difficult.
Within five years, Pebble ceased daily operations. They stopped producing watches and honoring warranties.
The lesson: validate your differentiation and unit economics, not just your ability to raise.
Dip into your personal savings
Bootstrapping with your own money keeps control in your hands and eliminates interest payments.
If you’ve saved for a large purchase, you could redirect part of that toward launching your business—if you’re comfortable with the risk.
Know your downside. If the business fails, you need a plan B for personal finances.
The upside: you keep 100% of equity and all profits. No investor updates, no board approvals—just execution.
If you self-fund, separate business and personal accounts from day one and pay yourself modestly to extend runway.
This isn’t possible for everyone—but if your startup costs are low and you have, say, $20,000 set aside, it can be enough to prove traction and raise later on your terms.
Seek help from friends and family
In the United States, friends and family are a major early funding source.
They trust you. They believe in your potential.
Don’t be afraid to ask for a small loan or an investment if you can present a clear plan and repayment or conversion terms.
Unlike a bank, loved ones may offer friendlier terms—or even contribute as a gift—but treat it professionally to protect relationships.
Put agreements in writing (even simple promissory notes or standard investment documents). Share updates. If anything changes, communicate early.
The responsibility can sharpen your focus. Many founders say the desire not to let family down pushed them to execute faster and smarter.
Small Business Administration loans and microloans
Ask lenders about SBA-backed options. SBA 7(a) loans are flexible for working capital; 504 loans focus on major assets; microloans can help with small, early needs.
These loans often feature competitive rates and longer terms, but expect documentation and time for approval. Prepare financials, a use-of-funds breakdown, and collateral details.
Revenue-based financing
If you have recurring revenue or strong sales, some financiers advance capital and get repaid as a percentage of future revenue. There’s no equity dilution, but read the fine print—effective costs vary.
Grants, accelerators, and competitions
Look for non-dilutive funding: local grants, industry programs, university incubators, and pitch competitions. The money is smaller, but it comes with mentorship, credibility, and connections.
Step 3 – Look for a Strategic Partner
We’ve all heard it: “Two heads are better than one.” With the right co-founder or strategic partner, you can move faster and de-risk execution.
A partner adds experience, relationships, and—yes—capital.
Together, you may have enough saved to launch—or a stronger profile to secure outside funding.
Partners also spread risk. If things go sideways, you’re not carrying the full load alone.
The tradeoff is splitting equity and profits. If you raise additional capital, your share dilutes further—so choose carefully.
Work only with someone you trust and would happily spend long days solving hard problems with.
Before you raise a dollar, align on roles, decision rights, and values. Put a founder agreement in place with vesting, IP assignment, and a fair way to resolve deadlocks.
Healthy debate is an asset. Ongoing conflict with no decision framework is not. Define how you’ll disagree and commit.
Step 4 – Try to Minimize Initial Business Costs
The cheapest capital is the money you never need to raise. Ruthlessly prioritize and keep your burn low.
Reevaluate startup costs line by line. What’s essential for MVP and first customers? Defer everything else.
Make existing cash last as long as possible—target 12–18 months of runway if you can.
Work from home or use flexible coworking instead of signing a long office lease.
Pay as you go. Avoid prepaying for large quantities until you’ve validated demand. Negotiate shorter terms upfront and better pricing once volumes rise.
Use cost-effective materials and consider refurbished equipment where quality allows.
Think creatively: pre-orders, deposits, or paid pilots can finance production without outside capital.
Barter when it makes sense. Trade your product or time for services you need—especially with other early-stage companies in a situation similar to yours.
Leverage credits and free tiers from software providers. Start with no-code/low-code tools before you custom-build.
Hire contractors for specialized work instead of full-time roles until the workload is steady. Document processes early so handoffs are smooth.
Above all, measure ROI. If a dollar doesn’t move you toward customers, revenue, or a key milestone, don’t spend it yet.
Conclusion
Starting a new business is exciting—and the first funding decisions shape everything that follows.
But it’s rarely cheap.
If you can’t self-fund entirely, explore bank loans and lines of credit, friends and family, angels and VCs, crowdfunding, SBA options, revenue-based financing, and selective grants or accelerators.
Always start with a sharp plan, a clear use of funds, and realistic financial projections.
That preparation makes it easier for investors and lenders to back you—and easier for you to execute once the money hits your account.
Keep costs low, build only what customers need now, and extend runway until a steady income stream takes over.
Follow these steps, and you’ll put your startup on a smarter path to raising money—without losing your grip on the business you’re building.
Good luck!