9 Ways  Your Startup Can Grow Without Venture Capital

By Brett Farmiloe

While venture capital funding may seem like a top financing option for small businesses, the reality is that less than 1% of startups receive their funding from venture capital financing. From seeking credit on purchases to equity-free grants, there are plenty of ways to finance a startup without venture capital.

9 non-VC ways to finance your startup

1. Seek credit on your purchases

"Seeking credit on purchases is a great way to grow your startup business without venture capital financing. When a business seeks credit on purchases, it is essentially getting a loan from the vendor or supplier to help purchase inventory or other necessary items for the business. This can be a great way to grow a business because it allows the startup founder to get the items they need without having to give up any equity in their company. In addition, seeking credit on purchases can help a startup founder build their credit history, which can be helpful in securing future loans."

—Lorien Strydom, Financer.com

2. Presell or obtain revenue financing

"One of the most powerful methods to finance your business is through preselling [your product or service]. This is the concept that Kickstarter and similar platforms were built off of, and is a good idea if you have almost no startup funds.

"If your business is already running and making money, you may qualify for revenue financing, in which an organization, usually some type of fund, lends money in return for a percentage of the revenue you're making. When you pay the lender back, if you make more money one month, then your payments are higher that month; if you make less one month, then your payments are lower as well."

—Daniel Ndukwu, UsefulPDF

3. Invest your own resources

"Startup founders can grow their companies through bootstrapping. Bootstrapping is when a founder uses their own personal resources to finance their business. This could be through savings, credit cards, or loans from family and friends. A bootstrapped business has more control over its finances and can avoid giving up equity to venture capitalists. It's also a low-cost option where the founders can be more aware of the costs associated with their daily operations."

—Johannes Larsson, JohannesLarsson.com

4. Join an incubator

"Depending on your startup and how much funding you need, joining an incubator can help you get things up and running until the business starts bringing in some profit. You should find an incubator that offers funding relevant to your needs. Be sure to make a solid business plan with all the necessary information to convince the judges that your startup is worth funding."

—Nicole Thelin, Low Income Relief

5. Offer equity in the business

"Offering equity to close contacts can help a startup getting funding from people close to the founder without giving away too much equity. A second option is to offer commensurate equity to current/future employees as a way to reduce compensation costs and bring on quality talent. This will assist in growing the business in the early stage and give the startup a longer financial runway."

—Scott Annan, MyCube Safe

More articles from AllBusiness.com:

• 4 Types of Crowdfunding: Which One Is Right for Your Business?
• How Crowdfunding Helps Close the Funding Gap for Women Entrepreneurs
• Is Your Startup Ready for Equity Crowdfunding? 7 Questions to Ask 
• 5 Startup Funding Options for Your Business
• Can Crowdfunding Help Save American Small Businesses?

6. Start small

"Instead of investing a large amount of capital into a business and putting the founders at risk, starting on a small scale can help reduce costs significantly, reducing risk in the process. Founders can expand the business once it starts making a profit. By starting small, only a small amount of capital is required, and any profit that is made goes back into the company and reduces risk significantly."

—Jenna Nye, On The Strip

7. Enlist support from family and friends

"Your closest friends and family members are among the most valuable assets you possess. The difference between a successful project launch and the demise of your business could be as little as a few thousand dollars. There is no shame in asking those closest to you for financial support."

—Billy Parker, Gift Delivery

8. Try crowdfunding

"Consider crowdfunding as a way to build and grow a startup without venture capital funding. The popularity of crowdfunding is on the rise, and crowdfunding gives business owners complete control over their company's goals, values, and rate of expansion. There are also a variety of ways to raise funds through crowdsourcing, including donation- and reward-based options."

—Chris Heerdegen, OnDemand Painters Midwest

9. Apply for equity-free grants

"There are plenty of equity-free grant programs that will allow you to raise money without investors. At our company, we have managed to raise more than $200,000 in grants only, including one from Google. Grants are perfect for early-stage startups seeking to boost their businesses without giving up their shares."

—Vitalii Romanchenko, Elai.io

RELATED: 10 Reasons Why Your Startup Idea Sucks and Won’t Get Funded