Startup Funding Options: From Bootstrapping to Venture Capital
Entrepreneurs have a variety of choices to choose from when it comes to financing a business, each having pros and disadvantages of its own. The many ways to fund a business, from bootstrapping to venture capital (VC), are broken down here. Bootstrapping Bootstrapping is the art of self-funding. It involves using personal savings and revenue generated by the business to fund its growth. While it offers full control and avoids equity dilution or debt, bootstrapping can limit the speed at which a startup can scale. Many successful businesses, like Basecamp, began as bootstrapped endeavors. Friends and Family Entrepreneurs often turn to friends and family for early-stage funding. This source of capital can be quick and relatively straightforward. However, it's essential to formalize agreements and manage expectations to avoid strained relationships in case of business setbacks. Angel Investors Angel investors are high-net-worth individuals who provide capital in exchange for equity in...