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The idea of creating and launching your own business is one of the cornerstones of the American dream. Many successful started their company due to them wanting more than making other people rich and decided to take their skills and ideas and create their own business. But starting a business from the ground up isn’t a cheap task. How do you go about funding an upstart business idea?

Do It Yourself

DIY funding, often referred to as “bootstrapping,” means you come up with the funds needed to start your business yourself. If that means you have to empty your savings accounts, take a second mortgage out on your home or raid your 401k, bootstrapping is the concept that your business will launch with your money and nothing else. Self-funding is the essence of “high risk and high reward.” While you’re the only person with any risk involved, this method also gives you the ability to maintain total control of your business.

Venture Capital

If you’re seriously considering launching your own business, there’s a decent chance that you have watched ABC’s Shark Tank. If you haven’t, the premise of the show is that small business owners pitch their ideas to a panel of millionaire and billionaire investors who decide whether or not to invest for a portion of the equity. While you may never make it on to national TV to make your pitch, reaching out to venture capital investors is a reliable option when looking for funding for a new business.

Small Business Loan

Before you apply for a small business loan, you will need to write a business plan. In general, you should plan on writing one anyway to keep yourself on track, but a lender will require one when deciding whether or not to approve your loan application. Get your plan together and begin contacting banks and credit unions to get their rates and requirements for an SBA loan.


Ultimately, crowdfunding a company is pre-selling whatever it is that your new company is going to offer. People who are interested in being your customers purchase your product or service, but instead of equity, they get a “gift,” which is some form of what you’re going to be offering. Crowdfunding is popular because of the low risk associated with it. If the business fails, no one gets their money back, and the owner isn’t liable to any lenders. Furthermore, you retain 100% control of your new company.