7 Types of Funding
THE THREE Fs - FRIENDS, FAMILY, & FOOLS – This is where most start-ups get their seed money (not that we’re calling anyone fools, it’s just a phrase!)
CROWDFUNDING – Crowdfunding is a relatively new option allowing you to raise lump sums from lots of individuals who can contribute smaller and larger amounts. This is facilitated via digital platforms.
ANGELS – An angel investor (aka business angel or seed investor) is traditionally a high net worth individual(s) who provides funds for business start-ups in exchange for a share of the business. This is likely to be a larger percentage at the earlier stages.
SHE-EO – A fund to support new ventures headed by female entrepreneurs. Five hundred women investors (known as activators) contribute $1100 each to create a capital pool to offer interest-free loans of $100k, to be paid back within five years, to five start-ups at a time. Described as an act of radical generosity, the funders return is zero in dollar terms, but huge in making a difference.
GRANTS – NZTE has grants of up to $600,000 to help ‘internationalise’ business. Check out the fit for you.
VENTURE CAPITAL (VC) – VC or Venture capital companies invest in the $10-$100 million range in high growth, high risk companies that already have an exit strategy in place.
PRIVATE EQUITY – For later stage companies.