3 Funding Options for a New Startup

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Creating a new startup is still one of the most exciting things you can do in life.

There is something about taking a simple business idea and turning it into a successful business with thousands of customers or users that makes the whole process so special.

Simple things like product development and getting your first customer are also milestones worth celebrating.

Before you can reach that level of success, however, you need to figure out how to best start your new business venture.

More importantly, you need to decide the right type of funding you want to use for the new startup.

There are a lot of options to consider, but we are going to focus on three funding options for a new startup in this article.


Bootstrapping – which is basically self-funding – is how many of today’s most successful startups were initially financed.

Rather than relying on a loan or an investment from a third-party, you turn to the money you have saved and help from friends and relatives.

Bootstrapping is great for two reasons.

First, you retain complete ownership of the startup. This means you can make decisions more rapidly, adapt to market changes in an agile way, and gain a lot of advantages over companies with complex decision-making processes.

The second advantage is the flexibility.

Since the startup is fully self-funded, you can be more flexible with the way returns are shared among those who lend you money as well as with yourself. You can also be more flexible with the way you attract new investors in the future.

However, bootstrapping has its limitations. Unless you have sufficient funding for your startup, you will have to turn to other financing options at some point.

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Business Loans

Another way to fund your new startup is by using business loans.

This too is an interesting approach to starting a new venture. You get the funding you need to get started, but you are not giving away ownership of the company. Instead, you pay a fixed fee to the lender in the form of interest.

Business loans are so much easier to find these days too. You can compare interest rates and quotes from multiple lenders using tools like LendingExpress.

In the case of LendingExpress, the online tool will also find lenders who are interested in your industry and match other details about your business too.


The third funding option we are going to review in this article is crowdfunding.

When you know you have a great business or product idea in your hand, you can turn to potential customers for funding. Through platforms such as Kickstarter, you can raise the funds you need to turn your prototype into a mass-produced product.

Crowdfunding also allows you to retain ownership of the startup. That said, you have to convince potential customers and make sure you can deliver on those promises for the crowdfunding campaign to be successful.

So, which of these three funding options are best for your new startup?

Whether you use one of these funding options or one of the other alternatives currently available, consider the advantages and disadvantages of the options you have and choose carefully based on how you want to establish your business.

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