Raising Money for Your Business? 9 Alternatives to Investors.

Members of the Young Entrepreneur Council share alternative fundraising solutions for entrepreneurs not looking for investors.
Young Entrepreneur Council
Expert Contributor
October 1, 2021
Updated: October 6, 2021
Young Entrepreneur Council
Expert Contributor
October 1, 2021
Updated: October 6, 2021
fundraising-business-tips
Top row, from left: Andrew Schrage, Duran Inci, Kristopher Brian Jones, John Turner, Saana Azzam. Bottom row, from left: Josh Kohlbach, Benjamin Rojas, Kalin Kassabov, Blair Williams.

Entrepreneurs may have many reasons for not seeking out investors for their startups, not the least of which is the desire to maintain total control of their companies. New entrepreneurs may not realize that other options are available that can be just as effective for getting a business started without all the cons of an investor.

Below, a panel of Young Entrepreneur Council leaders list some alternatives to investors that entrepreneurs can explore in order to fund their projects. Whether you choose to pursue one or a combination of these suggestions, effective fundraising solutions exist for every type of business.

9 Fundraising Alternatives to Investors

  1. Family and friends.
  2. Crowdfunding.
  3. Local government aid.
  4. Business partnerships.
  5. Pitch competitions.
  6. Business incubators and accelerators.
  7. Nonprofit partnerships.
  8. Grants.
  9. Social media.

More From the Young Entrepreneur Council12 Things You Should Never Do After Receiving a Bad Customer Review

 

1. Family and Friends

You might not think family and friends are suitable if you need a lot of money, but they could be, and it never hurts to try. Plus, you already have the built-in fact that these folks know you and probably believe in you, which are two major hurdles when seeking funds from investors. They may also know of people who might be willing to invest more significantly. —Andrew SchrageMoney Crashers Personal Finance

 

2. Crowdfunding

If you choose to crowdfund your business, consider researching alternatives to Kickstarter or Patreon. For example, Wefunder allows for equity crowdfunding. You gain more access to capital without the barriers that may come with poor credit. If you have a product or service that provides a healthy return on investment, consider such a platform. —Duran InciOptimum7

 

3. Local Government Aid

Most local governments have economic development money from the state or federal government that is specifically designated for startups and small businesses. In most cases, the money is in the form of low-interest loans with favorable terms, but it may also be in the form of a grant, which you don’t have to pay back. Start with your local chamber of commerce as a resource and be persistent. —Kristopher Brian JonesLSEO.com

 

4. Business Partnerships

In my experience, partnering with other businesses is a great way to raise money and establish stability. You can find plenty of medium to large businesses that like to partner with smaller brands. Look for a company that complements your product or service and has a solid reputation, and you might just find an investor and business partner. —John TurnerSeedProd LLC

 

5. Pitch Competitions

Pitch competitions are a great way to get exposure, potential investors and funding. Winners of these competitions often get direct exposure to investors and can also secure a PR contract, legal services and even a speaker agency contract. Many pitch competitions also offer equity-free cash prizes. —Saana AzzamMENA Speakers

 

6. Business Incubators and Accelerators

One way to raise money is to consider business incubators and accelerators, depending on your goals. If you’re in an early stage, incubators can help nurture and assist your business by offering you a solid foundation. If you’ve already left that stage, it’s time to look for accelerators. They can help you speed up your growth by taking a giant leap. —Josh KohlbachWholesale Suite

 

7. Nonprofit Partnerships

Getting involved with nonprofits in your industry and helping them fulfill their goals can help you get noticed by board members who often help fund prominent companies. If you can present outstanding results, they will most likely want to learn more about your business ventures. Creating new relationships based on trust will make raising funds for your company easier. —Benjamin RojasAll in One SEO

 

8. Grants

Look for grants that your project may qualify for. Universities and nonprofits offer grants for startups that meet certain criteria. The Small Business Administration also has grants for businesses involved in scientific research. Consider all the ways your business can help people and then research organizations that promote these types of solutions. —Kalin KassabovProTexting

 

9. Social Media

A great way to raise money is to spread the news about your company on social media. You need to build your profile online and keep publishing content. Build a following and talk about how your product can help people. If you get enough attention, you’ll be surprised by offers for investments from unexpected places. —Blair WilliamsMemberPress

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