The Art of Startup Fundraising

6Sources of Capital

What fundraising options are there for startups today?

There are at least 10 different sources of funding for startups, from seed money to working capital. What are they, how are they different, what are the pros and cons, and which is right for you and the current stage of your company?

Bootstrapping

In recent years, the explosion of “bootstrapping” startups became the epicenter of many other trends and industries from house hacking to digital nomads, to the ramen diet (and restaurants), coworking spaces, and numerous blogs and guides. The power of bootstrapping should not be underestimated, but it isn't always as glamorous as tech media often portrays.

Bootstrapping really means launching and growing a startup with resources that you already have, and pulling yourself up with a little grit and sweat equity. Technically you could be bootstrapping if you have a six-figure retirement you can tap. Most are working with substantially less, although it's also true there are plenty of startups that are now worth billions that were started with $1,000 or less.

As a good example, I like the story of dating site Plenty of Fish. The founder bootstrapped the business by paying operating costs with Google ads and barely raised money from outside large institutional investors. The company was recently acquired for $575 million in cash by Match Group—definitely a one-of-a-kind success story.

Bootstrapping at the start has many benefits, even for those hoping to raise ...