BOOTSTRAPPING

EARLY-STAGE BOOTSTRAPPING

Many founders use their personal savings to launch their company and continue to work in their jobs as they build. Try creating a simple prototype or something similar to see if your business idea has mileage.

Plus: Bootstrapping advice for a founder and CPA.

CUSTOMER-FUNDED MODELS

Often considered the second stage of bootstrapping, customer-funded companies operate only with the money they make. These businesses have either a sizable customer base or a business model that accounts for operating capital. Entrepreneurs who haven’t launched their businesses can take advantage of customer-funded models as well, for example by enticing customers to pay upfront before they continue developing their products or services.

FRIENDS AND FAMILY

Lots of entrepreneurs turn to friends and family for seed funding. But a word of caution: be sure to treat these generous loved ones like formal investors by having them sign an agreement that outlines what rights their investment gives them, as well as being clear there’s a chance they won’t see that money again.

REWARD-BASED CROWDFUNDING

Using platforms like GoFundMe, iFundWomen, Kiva and Kickstarter, entrepreneurs can solicit investments as low as $100 from individual supporters and give them rewards in return, like a social media shoutout or a product sample. This is a great option for getting seed funding or introducing a new product before it’s gone into production, and it’s popular with founders in creative industries. On the other hand, many business owners find these campaigns time-consuming and sometimes more expensive than they anticipated when it comes to sending out the rewards to their investors. Plan your crowdfunding storytelling and marketing before you launch with this expert advice.

Plus: Indiegogo’s co-founder shares essential crowdfunding tips.

GRANTS

Though grants are a form of outside funding, they don’t require repayment or giving up equity, which is why they’re great for founders who want to continue bootstrapping. They are also helpful with short-term cash flow concerns or operational expenses. Many grant programs have networking and educational opportunities to support entrepreneurs. Start your search with the Access to Capital Directory for Women’s Entrepreneurs.