PREPARE FOR GROWTH

Bootstrapping allows you full control: no need to worry about keeping investors or shareholders happy. It may also be your main option if your business is too new for bank loans. 

Early-stage bootstrapping: Many founders use their personal savings to launch their company and continue to work in their jobs as they build. 

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 includes operating capital.

This option is best-suited for high-growth startups with a significant potential market share. Equity financing means giving away some of control over the business, including hiring and growth decisions. 

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 high return on investment.

Accelerators and incubators: Accelerator and incubator programs support early-stage companies with resources like networks and education in exchange for equity ownership.

You may be a candidate for debt financing such as bank loans if your business has been operating for at least two years and you likely have a strong credit rating. Before pursuing debt financing, talk to your bank about your options and goals.

Traditional banks: Banks usually have stringent requirements, including some pretty high annual revenue minimums. Many even require collateral. Applying for a traditional bank loan is also a lengthy process that can take one to three months.

Microlenders: These lenders allow business owners to borrow as little as $500 to support their companies, and have repayment periods that start at three months long.