19 Ways To Fund Your Startup Without Your Own, Your Friend’s And Your Family’s Money

Believing it’s extremely difficult to come up with money in the first place to fund your venture and live your dream exists among the biggest objections to starting a business and living one’s purpose and dreams. But I want you to reframe this seemingly HUGE obstacle: If your idea is a genuine opportunity that has a great chance of paying off in a few years, both monetarily and in terms of your own satisfaction and happiness, are you really willing to look back to the past a few years from now and realize that you settled because uncomfortable obstacles stood in your path?
If you’re still reading, you must believe there’s a path over this financial obstacle-that’s good. I want to show you a way that you can gather the resources that you need without “blood money” (borrowing from friends and family which can cause a lot of unneeded tension) or your own money (which you may not have, or doing so would put a strain on your own life). But before we get into this, it requires understanding one fundamental thing:
“You can’t get something from nothing.”
If you want to get value, you have to give that value first. Even grants don’t come because you have a good idea alone. You have to put in the work to demonstrate quite concretely how your idea is going to bring value to society. If you want to get money for your business, you’re going to have to contribute your mental capital, your talent capital, items of value that you can exchange for capital, and your social capital. Below is a list of 19 ways you can start to contribute value to gain capital to start your business NOW:
Hold a fundraiser. “A fundraiser that’s not for charities? Yes.” If you have a powerful cause and let people know that you’re a first time entrepreneur but your idea is going to benefit peoples’ lives and will create jobs, but you don’t have money, people with sympathize. They will want to help. A friend and mentor of mine organized a “bowl-a-thon” where people came and paid a little extra to bowl for the fundraiser. His optimism and honesty was so contagious that he walked away with several thousands of dollars at the end of the day.
Sell stuff around your house on eBay. I recently moved from New York to SF and really didn’t want to move all of my stuff, so I decided to humor myself and list books, old manuals, and cheap souvenirs on eBay and made nearly $2,000 within a week on stuff that I thought was junk.
Get cash back on credit card payments and transfer that money to your “business fund.” If you’re using your credit card for everyday purchases anyway, why not recover some of that money and use it to fund your business?
Create knowledge or services and sell it. Remember, your talent is capital and can be converted to money. What knowledge do you have that other people would pay for? I knew how to trade the financial markets and get a respectable return, so I started blogging about it, then I put together a course just by recording screencasts of my trading activities and people paid $997 for it. If you have a service you can offer, start letting people know about it. In fact, you can go to and list it there so someone can hire and pay you.
Start small and trade up. People attribute different amounts of value to different things. If you can trade something you have for something of more value and keep doing that until what you have is valuable enough to exchange for a sizeable sum of cash, you have another source of startup McDonald did exactly that with in his “One Red Paper Clip” true story.
SBA loans. You can apply for SBA loans from your local bank or credit union. The Small Business Association (SBA) guarantees 50-85% of the loan (basically acting like a cosigner) so that you have a higher chance of obtaining the loan when it would otherwise be much more difficult. Amounts vary from tens of thousands of dollars to six figures.
Grants. Grants are the closest thing to free money that you’ll get. Usually a government or private organization wants to provide an incentive for business or development activity in a certain area and gives out money to make it happen. All it takes is coming up with a good plan and applying. A more extensive guide to approaching grants is provided here. If you’re doing a tech startup, a great place to start is SBIR (Small Business Innovation and Research) grants. The money comes in phases, or stages, in which you must demonstrate tangible progress before receiving more money. Lastly, you may want to consider some state level grants. Michigan, for example, is providing heavy incentives for startups to start in Michigan due to the collapse of the auto industry there.
Start in a business incubator. Business incubators, such as the Y Combinator and startup programs in many business schools provide the resources and contacts for entrepreneurs who are serious about turning their idea into a reality.
Call upon angels. “Angel” investors are often previous entrepreneurs who made it big and are retired but want to stay in the game by funding other startups. They will ideally have industry expertise in what you’re doing and typically provide investments in the six figures.
Go to the “Dragon’s Den.” Top tier venture capitalists invest tens to hundreds of millions per startup into only a few ideas that they think are going to pay off substantially ($1 billion +), realizing that not all of their investments will be successful. If you start at a lower tier, it’s possible that you can compete for smaller pools (if your business is more of a $10 million one). Just keep in mind that although they will gather the resources, including people and companies, venture capitalists will own you, both in terms of time and money. Take a look to see what kind of firms cover your niche. A good resource on angel and VC funding can be found here.
Become a distributor in the supply chain of your niche without holding inventory. Suppose you have a new headphone design for runners who listen to music while exercising. It may cost you a lot to start manufacturing and selling your headphones, but what if you started an eBay store and sold already-made headphones and reinvested the profits into starting your own business? If you use a “drop-shipping” service you don’t even need to invest in inventory-you start completely for free! Getting into the industry as a distributor before becoming a producer can often lower your barrier to entry.
Be a JV broker and network, network, network. A “joint venture broker” puts two people together who need each other to do business and receives a commission for doing so. You can do a search on this for more information, but essentially you go to conferences or any other place where you meet people, get to know them and ask how you can help them. They’ll usually explain that they need X type of customer or Y type of supplier. Sooner or later you’ll find a match and you tell them you can connect them in exchange for a commission.
Work with your company to create an employer intrapreneurship program. This is creating the best of both worlds. You have your day job which is producing income, and you get to work on starting a spin-off company while you’re there. Your employer would likely be up for it because the innovation would benefit the company.
Create a content website and sell advertising. These days it’s easy to start a blog on WordPress or a video blog on YouTube and share information or creativity that others would enjoy. Meanwhile, with Google AdSense or banner advertising networks, you can get paid for the value you create by allowing visitors to click on advertising alongside your content.
Build a social network surrounding your cause and accept donations. If you center your business upon a cause and get people really excited through regular, high energy updates and activities, people will become your advocates and send in donations when you request them. It’s getting easier to do this with Facebook Pages, Twitter feeds, blogs, and forums. Think “building communities.” Once you do that, people will support you.
Partner with non-profit organizations and get sponsorships. Just because you are “for profit” doesn’t mean you can’t partner with non-profits. If your cause is aligned with theirs you can help fulfill their mission, from their perspective. Brendon Burchard, author of “Life’s Golden Ticket,” coaches entrepreneurs on how to facilitate these partnerships to eliminate the need for applying for funding and launching expensive marketing campaigns.
Enter a business plan competition. Not only do you have a decent chance of scoring a nice five figures or more at these if you have a well thought out, unique idea, but the networking opportunities and flow of ideas here are incredible.
Apply for microloans. No longer are microloans reserved for young women in Africa to start local shops. You can apply for hundreds to tens of thousands of dollars of microloan funding for your own business. The SBA resource on micro loans explains the process of obtaining them in more detail.
Utilize social arbitrage. Find something non-monetary that you can offer to somebody in exchange for a service that you can sell to another person for. For example, you could find a college intern who wants business experience or a place to stay and is good at writing computer programs. If you know people who need programming help you could have her work on it for them and you would receive cash. Everybody wins.