raising startup capital

5 Unconventional Ways to Raise Money for Startups

Your startup has been in the works for months, or even years. You’ve thought of every detail, from its name and logo to how it will be marketed and sold. You’ve even formulated an exit strategy—but now you need money to get your idea off the ground. In this post, we’ll explore five unconventional ways founders can raise capital without going through venture capitalists or angel investors: crowdfunding, competitions, pitch festivals, grants, and government loans.

Crowdfunding

Crowdfunding is a way to raise money by offering your product or service to a large number of people. The most popular crowdfunding platforms are GoFundMe, Kickstarter and Indiegogo. Crowdfunding is a great way to get validation for your business idea. If you can’t find any early customers, then no one will come back later when you’re ready to sell more products or services. It’s also useful for raising funds without having to give up equity in your business (more on this later).

If you’re just starting out, crowdfunding may not be the best option for you because there aren’t many people who have heard about your company yet and that means there may be a limited demand for what you offer. On the other hand, if there’s already demand for what you offer (for example: dog grooming products) then crowdfunding could be worth considering as an alternative financing option. This is especially the case since investors are looking at metrics like conversion rate when deciding whether or not they want their money involved with projects such as yours!

Idea validation competitions

An idea validation competition is a competition in which you, the startup founder, submit an idea for a new product or service that you want to build. The organizers of the idea validation competition will then assess it and award one or more prizes for the most promising ideas.

An idea validation competition differs from a pitch contest in that it does not require you to make a formal presentation on stage. Instead, your work should be judged based on how well you write about your business plan and how much research you have done into what users want in this market space.

In addition, unlike most pitch contests which take place at events like TechCrunch Disrupt or SXSW Interactive Festival (and where every presenter gets their own stage), during an ideation competition everyone’s ideas are posted online so no one feels like they’re getting lost in the crowd.

The good news is that there are many different kinds of Idea Validation Competitions out there – some focused on specific industries like healthcare while others focus on sectors within technology such as FinTech(Financial Technology). And since these competitions are growing increasingly popular among startups looking for funding they’re often open year-round with multiple rounds each month so don’t wait around – submit your idea!

Pitch Festivals

Think of a pitch festival as a cross between a job fair and speed dating. You get to meet with lots of investors and potential partners, all in one place. Pitch festivals are also great for gaining exposure for your idea—you can do it at events like SXSW Interactive or TechCrunch Disrupt that draw thousands of attendees from around the world.

If you’re planning on applying to pitch festivals, here’s what you should know:

  • Know your audience. Who are these investors? What are they looking for? How much money do they have available to invest? Do they prefer early-stage startups or later-stage ones? Do they like consumer products over enterprise software?
  • Have an elevator pitch ready. Even if you’re not sure someone will ask this question outright (and many won’t), it’s good practice to have something ready just in case so that you don’t waste anyone’s time when they try asking about your idea too early on in the conversation.”

Government grants

If you’re looking for funding and don’t have a lot of experience, grants may be a good way to go. While grants typically aren’t as prestigious as venture capital or angel investment funding, they can provide the necessary capital to get your business off the ground. Grants are often awarded to startups that are socially responsible, environmentally friendly, or innovative.

In order to qualify for government grants, there are certain criteria that you’ll need to meet some which include:

The startup must be registered as a business in the country where the grant is being offered. You’ll need to have a business plan, which means you’ll need to know exactly how you’re going to use the funding and what your goals are.

Angel investors

  • An angel investor is a person who invests in startups, generally when they are at the seed or early stage of funding.
  • Angel investors are not as concerned with financial projections and projections as VCs, but rather focus on other factors like the team or market opportunities.
  • Angel investors often invest their own money in startups and can also bring their professional networks to bear on behalf of your business. They may be willing to invest up to $25,000 in a company with no formal pitch deck, but expect you to have done some research about them before approaching them directly (e.g., social media accounts).
  • You can find angel investors by starting with your network (friends and family), then expanding outward based on those who have invested in similar companies previously.

Recap: Ways to raise capital other than venture funding

There are many ways to raise capital other than venture funding. Here are a few options:

  • Crowdfunding – A great way to get your name out there and test your product, but you have to prove that people want it.
  • Idea validation competitions – You might win money or be able to pitch at a prestigious event. These are great if you’re just starting out, but they can also be a distraction from focusing on making sales.
  • Pitch festivals – Same as above, but these tend to be more focused on startups with proven traction and products rather than ideas alone (though there are exceptions).
  • Government grants – Some governments offer non-dilutive funding for early-stage companies; it may take some time before these help you make money or even see any return on investment (ROI), but they’re an option nonetheless.
  • Angel investors/seed funds/VC funds – If you’ve already been rejected by VCs above this level then try pitching them again with more experience under your belt!

Conclusion

Raising capital is a critical part of starting up your business. The more capital you have, the more resources you’ll have at your disposal and the more time you can spend figuring out how to use those resources effectively. But don’t worry—there are plenty of unconventional ways to raise capital that don’t involve selling equity or taking on debt (which could limit your ability to grow). If all else fails, crowd-funding campaigns might be a good place for startups to start when looking for funding opportunities.


Keetria is an entrepreneur, wellness advocate, and brand strategy coach for creatives & entrepreneurs with 16 years of public relations expertise working with some of the world’s leading brands, startups, media personalities, and entertainers. If you would like to work together, don’t hesitate to reach out!

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