Seeding Innovation

BA 101 on Funding for Startups

AS COVERED IN Chapter 9, entrepreneurs will fund their businesses according to their needs, personal financial situation, growth trajectory and other factors. Some of the options available include:

• Bootstrapping
• Angel Investors
• Venture Capital
• Crowdfunding
• Small Business Administration Loans
• Grants

When meeting with those in venture capital, it helps to keep this in mind, as these terms are frequently used:

Funding Series	Typical Capital Raised	Company Stage
Series A	$2 million to $15 million	Early stage
Series B	$10 million to $60 million	Expansion stage
Series C	$20 million to $100 million	Growth stage
Series D	$30 million to $150 million	Late-stage

According to the Founders Network website, other funding options include:

• Working Capital Loans, which provide short-term funding to cover operational expenses, bridge cash flow gaps, or invest in inventory to meet customer demand
• Revenue-Based Financing, which involves raising capital in exchange for a percentage of future revenue
• Merchant Cash Advances, which can be used if your startup generates revenue through credit card transactions and allows you to receive upfront funding based on your future card sales
• Invoice Financing, which is also known as accounts receivable financing and, allows you to receive immediate funding by selling your outstanding invoices to a third party at a discount

Your choice on how you fund your business depends on your company's needs, growth, eligibility, ...