What is Financial Management? Definition and Examples

5 sources of start-up financing


When starting up your new business, keep in mind that bankers aren’t your only source of income. There are other ways to get financial help for your start-up.

Below we have mentioned 5 start-up business grants that will help you grow your business.

Individual investment

Everyone has to start their new business with their own money at the beginning. You should start saving a little from the very beginning when a business idea strikes your mind.  This demonstrates to investors and bankers that you are serious about your business and willing to take risks.

Venture capital

Venture capitalists invest in a company to help it carry out a potentially lucrative but risky endeavour. This entails handing over some ownership or equity in your company to a third party. Venture capitalists also expect a good return on their investment, which is usually achieved once the start-up starts selling stock to the general public. Make careful to find investors with relevant experience and knowledge for your company.


Crowdfunding brings together the money of many people to create a large investment in a business. There’s crowdsourcing for setting up loans (P2P lending), crowdfunding for finding investors, and crowdfunding for raising funds simply because people want to support your business. People can, for example, donate money after seeing your prototype to be first on your customer waiting list.

A captivating tale about your product, service, or organization, as well as a relevant reward for donations, are the keys to successful crowdfunding campaigns. Crowdfunding campaigns have helped some firms raise hundreds, if not millions, of dollars.

Seed Funding for Start-ups

Seed money is the first round of funding for your business. It may be anything between $50,000 and $500,000, depending on how impressive your presentation is and how much money you need to get your firm started. The issue is that this is one of the most dangerous investments.


Because you cannot demonstrate that your company will thrive. If it succeeds, your investors will be able to quadruple their money in a matter of years; if it fails, they will lose all of their hard-earned money in a matter of months.

Family and friends

Friends and family are a major source of finance for businesses. They can give capital in the form of debt (which you must repay), equity (in which they receive shares in your firm), or a combination of both.

Friends and relatives are excellent sources of capital since they trust you and are simpler to persuade than strangers. However, there is a chance that they will lose their money. You should also evaluate how this can affect your relationship with them.