Types of Fundraising

Self funding: means that the entrepreneur/founder provides the money for the start-up itself from personal savings or running on a tight budget.
- One of the main strategies is bootstrapping, where businesses use early start-up revenue to continue running their business rather than seeking outside funding. An upside to this strategy is founders keep equity rather than giving it to investors, whereas a downside is, if the company fails, the founder loses all their savings.

Loans: one of the other ways to fund your start-up/company is by loans. This money can be used to build, repair, and enhance your business.
- Loans can be provided by banks or traditional financial institutions or also by microfinance institutions.
- Microfinance is popular with founders who do not qualify for standard business loans.
  - These loans are normally smaller in amounts so they are more accessible for small businesses.
  - These loans have more flexible terms and the lenders may be more open to ideas that may be seen as too risky by other lenders.

Grants: is a financial award for a business from a government, corporation or a non-profit entity. Grants are like gifts, and do not need to be repaid.
- These grants are quite a competitive process, and in most cases your start-up has to qualify for funding by aligning to the goals and values of the government, corporation or a non-profit entity's grant you are applying to.

Incubators and Accelerators: these are essential programs for start-up founders, especially for people who are starting a business for the first time. These incubators and accelerators provide mentorship, networking and access to capital (funds).
- Incubators help entrepreneurs build their business, develop a business plan, name, website and minimum viable product (MVP). If a company already has a MVP, accelerators help in expediting growth.
- Accelerators are competitive mentor-based programs offering guidance, support and limited funding in exchange for equity (the value of the shares issued by a company).

Venture Capital Funding: these are large investments which are ideally laid out for a start-up that is ready for large investment and can grow rapidly with the investment.
- Venture Capital Funding is difficult to get and requires a lot of time and preparation.
- Success in getting this funding sometimes results in an entrepreneur giving out a large chunk of their company to the investors.
- Venture Capital firms raise money from individual and/or institutional investors and pool them into funds that are later invested into potential high growth start-ups.

Angel Investment: an angel investor, in general, is a wealthy individual who likes investing in high risk, high growth startups in the very early stages.

In addition, loans from friends and family is also a popular method of raising finance for early stage startups. Globally, more than 10% of start-ups receive early stage funding from friends and family.