EQUITY FINANCING
This is an option best suited for high-growth startups with a significant potential market size. Equity financing requires founders to give up a portion of their ownership to a venture capital firm or other investors.
WHAT YOU SHOULD KNOW
Though entrepreneurs appreciate this debt-free financing option, equity financing means giving away some of their control over the business, including hiring and growth decisions. Having a strong pitch and pitch deck are key to attracting investors.
VENTURE CAPITAL AND ANGEL INVESTORS
Venture capital firms supply capital to a company in its early stages in exchange for equity. Angel investors are high net worth-individuals who operate similarly. Both kinds of investors are looking for scalable companies that will bring them a major return on their investments. Finding the right VC firm or angel is primarily about networking and building relationships, meaning it could be quite some time before money gets to your business. You can start your search with the Access to Capital Directory for Women Entrepreneurs.
Venture capital funding may not be the best source of funding for small business owners who want to maintain control of their company or who don’t plan to sell or take it public within the next five years. If you decide to pursue this route, be sure have a strong pitch and pitch deck, which will outline, among other things, how you’ll use the funds to scale. Before you finalize the investment, it’s important to double and triple check the agreements with a lawyer before partnering with investors–this isn’t something to negotiate on your own.
Think this is the best option for your company? Start your search with OpenVC and Outset Capital’s list of 180+ female-founded early-stage funds.
Plus: watch our webinar “Equity Financing Essentials” or read 7 Things to Know About Equity Financing.
EQUITY CROWDFUNDING
Business owners who turn to equity crowdfunding lean on their communities for support. Using platforms like CircleUp, SeedInvest and Republic, founders can collect investments of as little as $100 in exchange for equity ownership, as determined by the fundraising platform’s due diligence and founder. Under federal law, companies can raise no more than $5 million annually via equity crowdfunding.
Plus: Find out how one Tory Burch Fellow made equity crowdfunding work for her business.
ACCELERATOR AND INCUBATOR PROGRAMS
Accelerator and incubator programs support early-stage companies with resources like networks and education in exchange for equity ownership. Accelerator programs help businesses with strong foundations and at least a minimum viable product in the market with scaling to the next level. Many accelerators invest capital. Incubators, on the other hand, work with companies on product development, business model and launch, and rarely give out funding. Entrepreneurs find that both accelerators and incubators introduce them to incredible networks. Consider starting your search with Crunchbase’s list of 100 Startup Accelerators Around the World.
Venture capital firms supply capital to a company in its early stages in exchange for equity. Angel investors are high net worth-individuals who operate similarly. Both kinds of investors are looking for scalable companies that will bring them a major return on their investments. Finding the right VC firm or angel is primarily about networking and building relationships, meaning it could be quite some time before money gets to your business. You can start your search with the Access to Capital Directory for Women Entrepreneurs.
Venture capital funding may not be the best source of funding for small business owners who want to maintain control of their company or who don’t plan to sell or take it public within the next five years. If you decide to pursue this route, be sure have a strong pitch and pitch deck, which will outline, among other things, how you’ll use the funds to scale. Before you finalize the investment, it’s important to double and triple check the agreements with a lawyer before partnering with investors–this isn’t something to negotiate on your own.
Think this is the best option for your company? Start your search with OpenVC.
Plus: Watch our webinar “Equity Financing Essentials” or read 7 Things to Know About Equity Financing.
Business owners who turn to equity crowdfunding lean on their communities for support. Using platforms like CircleUp, SeedInvest and Republic, founders can collect investments of as little as $100 in exchange for equity ownership, as determined by the fundraising platform’s due diligence and founder. Under federal law, companies can raise no more than $5 million annually via equity crowdfunding.
Plus: Find out how one Tory Burch Fellow made equity crowdfunding work for her business.
Accelerator and incubator programs support early-stage companies with resources like networks and education in exchange for equity ownership. Accelerator programs help businesses with strong foundations and at least a minimum viable product in the market with scaling to the next level. Many accelerators invest capital. Incubators, on the other hand, work with companies on product development, business model and launch, and rarely give out funding. Entrepreneurs find that both accelerators and incubators introduce them to incredible networks. Consider starting your search with Crunchbase’s list of 100 Startup Accelerators Around the World.
FUNDING FINDER
ADDITIONAL RESULTS
Learn what kinds of financing to explore at another stage in your company’s lifecycle
BOOSTRAPPING
Bootstrapping means running your company using only your savings or the money the business brings in through sales. Still, there are creative solutions for cash-conscious founders.
Learn MoreDEBT FINANCING
We tend to think of debt as a nasty four-letter word. Here’s how it can do a lot of good for your business.
Learn More
INTERACTIVE GUIDE
FUNDING FINDER
Learn what capital options are right for financing your business
Get Started