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Every entrepreneur wants the very best shot at investment, whether that’s angel, seed, venture capital, institutional or private funding.

This means becoming highly investable as an entrepreneur and being deal ready. Most new entrepreneurs struggle to navigate this process and often do not have the knowledge, experience and resources to create a successful first time outcome.

There are many alternatives to funding and, most commonly, the following are used (particularly for a startup):

Self Funding

Self funding is often the way for a startup to fund a venture, usually consisting of small amounts of saved cash or credit card facilities. Mortgaging an asset, such as a home, is also common if the entrepreneur is at a later stage of their life. We have seen self funding range from as little as a $1,000 to over $1 million. Serial entrepreneurs with proven success and positive cashflow in their existing businesses often see self funding as the optimal choice.

Contra Service Swapping


Instead of cash for growth, many startups will exchange goodwill and services with other entrepreneurs. I have personally done this many times, as I believe in giving to receive. Keep in mind that many service providers, such as lawyers, designers, photographers and small scale entity vendors, will also be willing to work on a goodwill basis. However, they will also have the expectation that once the venture grows and produces a profit, they will then become one of your loyal paid service providers.

Crowdfunding

Though it can come with caution as a new form of raising capital, crowdfunding has seen providers like Indiegogo, Pozible and Kickstarter serve as a brilliant platform in connecting startups to public private money. Code.org is a great example of crowdfunding, having raised $5 million. Not only does this raise capital and awareness about your brand, it is also an opportunity to engage return customers. You should pay specific attention to what you are willing to provide and your businesses capacity to meet that.

Every entrepreneur wants the very best shot at investment, whether that’s angel, seed, venture capital, institutional or private funding.

Friends and Family

While it may be considered taboo to do business with friends and family, Mark Zuckerberg had his Dad as an early stage investor and the rest is history! Most entrepreneurs will keep a ‘love list’ — those they know that they may call on when they have no other options.

Bank Loans

In Australia, banks such as ANZ and CommBank have interest rate, no/ low security loans for entrepreneurs, so are in current product development. These loans are usually interest only first-year and have little or no security over them. This demonstrates that the big four banks in Australia are seeing the early stage investment into entrepreneurs and startups as future large customers. This is a means to raise working capital (debt) to fuel your business, rather than equity exchange for capital.

Seed and Angel Investors

Both of these groups are made up of private investors. Put simply: a group of investors create pool funds to back a startup or a private single investor may fund a venture. Both would require a well-thought out, polished pitch and excellent business plans, along with the entrepreneur’s personal value being equally conveyed. While they are for early stage businesses, the risk profile for an investor is much higher and investment rounds tend to be smaller until the business has acquired customers, sales and/or proven itself to be a viable investment.

Venture Capital

Venture Capital (VC) is usually institutionally driven and often made up of funds from high net wealth individuals seeking opportunity to invest in medium to long term ventures. These funds can carry up to $500m in disposable investment money and often are looking at already established, highly scalable, global and unique businesses with proven success. ‘Series A’ investment by VC is usually between $2m to $10m, while ‘Series D’ can be more than $100m in one round.

Rare Birds is an organisation with a vision to see 1,000,000 women entrepreneurs globally by 2020. Our mission is to give every woman the opportunity to become an entrepreneur by choice. We do so through the pillars of storytelling, mentorship, funding and community.

The Rare Birds Funding Matrix, a destination for helping women entrepreneurs to understand how to become investable, is a new function of our suite of tools for helping women raise capital. In April 2015, our Deal Room will launch, helping women entrepreneurs become exposed to investors on line with a full set of communication tools to assist in the Deal Room process.

First published May 2015.