Businesses need money to get started. Whether the money is used to purchase supplies to make products, hosting for a website, or technology to delivery a service, money is vital. There are several different ways to get this money, called funding models. Each way has pros and cons.
- Investment – People giving your business money in exchange for part ownership and control (called equity).
- Loan – Debt capital that you get from a bank. The bank will let you use the money for a specific amount of time if you agree to pay them back with interest (extra money on top of what they gave you). Check out an option for youth businesses here.
- Crowd Funding – Lots of people pledge money through different websites to a business campaign for something in return, like a version of the product. A popular version of crowd funding is through Kickstarter.
- Bootstrap – Using your personal assets to start your business. Often this involves reducing start-up cost, and trying to start making money as soon as possible.