Startup funding is one of the first — and most significant — financial decisions most business owners make. There are many options for acquiring it, from pitching to investors and applying to accelerators or incubators to crowdfunding campaigns and loans. Each has its own advantages and disadvantages, but in general the process requires a solid business plan and alignment with investor criteria to be successful.
Most startups require outside capital to purchase equipment, rent office space, and hire team members. They also need it to fuel growth until they can become profitable on their own. This is why it’s so important for founders to understand all the options for obtaining startup funding.
Depending on the stage of your startup, you might need to raise several rounds of capital: seed, Series A, Series B, and maybe even Series C. Each round of investment will require a new set of milestones, and will involve varying degrees of dilution for your company.
At the seed stage, you will be required to provide a clear and well-articulated business plan to investors in order to convince them that your startup is worth their risk. You will likely have no revenue, and will be able to prove that you have a large market opportunity and that your team is nimble enough to capitalize on it. Alternatively, you can try to self-fund your business with a combination of personal savings and revenue from early customers, or use a crowdfunding platform like Kickstarter to validate your product and build a customer base without any equity dilution.