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How to Easily Raise Capital for Any Business

Sarah Nuttycombe Updated on March 24, 2022

How to Raise Capital for Any Business

What can you do when you have an incredible business idea but no money to fund it?

Unless you’re an heir to an outstanding fortune, you will likely be asking yourself (and anyone willing to listen): how do you raise capital for a business?

The question may seem daunting, but there are more ways than ever to raise capital for business ventures. From loans or pitching to investors to discovering money within your own network, this article will lay out the multitude of options available to secure funding for your business.

Let’s dig into how to raise capital for any business venture you have in mind—from online businesses to traditional brick-and-mortar establishments.

Ways to Raise Capital

Let’s start with some traditional ways to raise capital for a business. Ranging from funding your own business to securing investment from private investors, the following options can give you an effective roadmap for raising funds.


How to build a business 101: keep your start-up costs low and under budget (a.k.a. bootstrapping).

For entrepreneurs, bootstrapping is a mix of self-funding their venture and ensuring that the initial costs of launching the business stay as low as possible. This allows an entrepreneur to make smart growth decisions in line with what is financially feasible so that their business can maximize its revenue potential.

Bootstrapping is the most cost-efficient way to start a business, but going this route will mean that more of the onus is on you (or you and a small team) to fund the business and get it off the ground.

The beauty of online businesses is that they are perfect for bootstrapping. Monetizations like Amazon Associates, display advertising, dropshipping, info courses, Amazon KDP, and service-based businesses are all scalable with little upfront investment required.

Moreover, whereas bootstrapping a business is often associated with long hours and hustle, these online business models require little maintenance once they are up and running.

The benefit of bootstrapping is you have more control over funding since most of the capital is derived from your personal investment of money and time. You don’t have to answer to the influence of outside investors. Furthermore, if you do decide to pursue outside investment later, your willingness to invest in your business from the beginning will signal that you believe in your business and so should others. You just may find that the initial bootstrapping phase is what leads larger investors to invest capital in later growth phases.


When crowdfunding goes right, you can gain more capital than expected to grow the business beyond initial expectations

Crowdfunding allows you to reach a wide audience of like-minded individuals who are interested in your product. Crowdfunding sites such as Kickstarter, Indiegogo, and GoFundMe allow you to set up a campaign for any idea you want to launch.

Crowdfunding has hidden benefits for would-be online entrepreneurs. A well-developed campaign could also be used as a soft launch of a product-based business. For example, crowdfunding could be used to launch a new product or design in the eCommerce space. If your campaign is successful, you confirm the demand for the product you want to sell and already have the customers and sales in place for the business to go live.

It’s killing two birds with one stone: raising capital while also getting valuable consumer feedback on your product. You’re less likely to fail with both components in place.

Excellent marketing and storytelling are key to success on these platforms. You’ll need to effectively sell crowdfunding donors on the benefits of your products since your business or idea may still be in its early phases and may need time and sufficient capital to deliver your product to patrons. With enough excitement generated by crowdfunding donors, you can exceed your capital raising goals and have a fleet of customers ready to buy into your business ideas.

Angel Investors

Approaching investors face-to-face with your business plan is what most people imagine when they brainstorm how to raise capital for a business. Likely, scenes of shows like Shark Tank come to mind.

However, the cutthroat reality TV image of raising capital isn’t the norm. There are investors who have a genuine desire to invest in businesses to get them off the ground. Often referred to as angel investors, Investopedia defines them as high-net-worth individuals who fund “startups at the early stages, often with their own money.”

The entrepreneur and the angel investor are each looking to reach their respective goals—an angel investor is looking for a higher return on investment (ROI) than other investments, and the business owner is looking for investment without having to give up too much equity or agree to difficult payback stipulations.

Despite what the name implies, angel investors don’t simply give out money to anyone. Securing angel investment will require a solid pitch and business plan. If you are seeking angel investment, make sure to have all your data analyses, marketing plans, and competitor research in place beforehand.

You’ll be selling them on the potential of the business and why it’s in their best interest to invest in you, and your presentation will need to be top-notch to get sizable investment.

Another added benefit: since an angel investor is typically someone who has succeeded in business in the past, they can possibly serve as an important mentor to guide you in scaling your business.

Connecting with angel investors is easier than ever in the internet era. You can start your search for angel investors through platforms such as AngelList and the Angel Capital Association.

Venture Capital

Venture capital (VC) is sometimes looked at as a step above angel investment, as it is more closely linked to traditional private equity. VC is typically managed by a firm where the money is invested by limited partners and managed by general partners.

Venture capitalists are looking for relatively mature businesses that are scalable and can return the most profit on the partner’s investment.

If you do manage to catch the eye of a venture capital firm, you’ll be looking at sizable investment in your business. Keep in mind that equity will almost always be expected, which means the investors will have a say in how the company is run.

Securing this kind of capital is competitive, so it’s imperative to sell the firm on why your business offers a unique investment opportunity and how exactly they can reap fantastic returns for their partners.

The most likely way to secure a pitch meeting with a VC firm is through your network or personal connections.

Investor and Operator Partnerships

One of the best ways to secure funding for your business is to leverage your skills.

While most advice around how to raise capital from investors revolves around making the perfect pitch for your business, it’s what you can DO for investors that can encourage them to fund your business.

If you already have skills and expertise in running a business, you can create a partnership with investors. Your expertise may be in running operations, which would make you the perfect partner for someone with money but no operational expertise. One person funds the business, the other person runs the business.

This kind of investor relationship works well for high-net-worth individuals who would like to get involved in a part of the business they are investing in but are unable to do it alone. On the flip side, entrepreneurs with tangible skills to scale a business can focus on what they do best with the capital they need to run their enterprise.

This same approach could be applied to the search fund model, where you offer your operating expertise to raise capital from investors and then acquire a business that fits the investment and experience criteria. This is slightly different from the previous model but is still a working partnership where the investors can be more of a co-founder in the building of a business.

Networking to Raise Capital

It’s all about who you know (or so it goes). When raising capital for your business, reaching out to your most valuable connections and turning them into investors may be your best bet.

Personal Network (Friends and Family)

The right investor for your business could be someone you’ve known your whole life. It could even be a member of your family. A friend or family member who understands you and your business ideas inside out and wants to see you succeed would be more likely to invest in your business compared to a stranger. That’s why sourcing investment from your personal circle can be an ideal route for raising money for your business.

That being said, it shouldn’t be just anyone you know. You’ll need to do due diligence on your network the same way you would when buying a business. The key to making this type of funding work is finding people in your network who have business experience and understand your vision for the business. They should comprehend the investment they are making, and there should be a clear plan regarding how they will recoup their investment.

You have to take these kinds of loans seriously. You have not only money at risk but also important relationships. Make sure to have everything in (legally binding) writing—put contracts in place and a way of managing payments on your loan so that all parties are protected.

If you can balance your personal relationship with someone who has turned into an investor in your business, using this method can be both personally and financially rewarding.

Entrepreneur Networks

Reaching out to entrepreneur networks is like reaching out to your personal network, but with more laser focus. If you want to find funding, you have to look where the money hangs out, and you’re most likely to find it among other entrepreneurs.

You can find other entrepreneurs by going to entrepreneur-focused events and mastermind groups, as well as among online entrepreneurship communities.

The beauty of reaching out to other entrepreneurs is they understand exactly what you are going through. They know your struggles and can provide mentorship to help shape your vision for building a business.

Odds are that if you share with them that you are searching for capital for your amazing business idea, they may know exactly who to reach out to or may even want to hop on board and help fund you themselves.

Real Estate Investing Clubs

I know what you’re thinking—why would real estate investing clubs make this list? I thought this was an article about raising money for businesses?

Yes. You are still in the right place.

Despite what the name implies, not all real estate investing clubs are interested in real estate alone.

The entire reason these clubs gather is to talk over smart investments. While most of their investment strategies concern real estate, more real estate investors are opening up to digital assets because of the similarity of the two industries and the potential for greater ROI.

What many real estate investors are finding is that it’s possible to build out a full-fledged portfolio combining real estate and digital assets. Both asset classes tick the boxes for offering passive income streams and being assets you can flip. In many instances, an online business can outperform real estate, which further encourages real estate investors to buy from our marketplace.

This is why your local real estate investment club meeting might provide your next investment source. As these groups often meet in order to invest together, pitching the option of online business investments may lead to new investments from multiple investors who would like to go in on it together.

To find out where real estate investors meet near you, look through this real estate club list.

Loans and Leveraging Assets to Gain Capital

Not to be overlooked, the oldest and most common way of gaining capital for a business is to, of course, get a bank loan. Let’s get into what business loan options you have.

Home equity line of credit (HELOC)

A home equity line of credit (HELOC) “is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower’s equity in their house (akin to a second mortgage).” People often use a HELOC when funding a large purchase since a house is typically the most valuable asset that people own.

HELOCs come with great advantages for starting a business. They can offer lower interest rates than other types of loans and flexibility in how to use the cash. You can borrow and repay based on your cash flow.

Taking out this kind of loan should be carefully considered. By using a house as collateral, you risk foreclosure if you cannot meet the loan requirements or make your payments. Interest on the loan can also fluctuate, so that will need to be monitored. Additionally, be aware of the tax implications of this kind of investment and speak to a tax professional.


Lendflow is a more recently developed option online entrepreneurs can take advantage of when trying to secure a loan for their business.

Lendflow’s online platform sets out to find all the different loans available to you and matches you with the loans you are likely to get. They use a carefully vetted network of lenders to find the capital structure that fits your specific needs and can even combine products to build for you a truly custom financing solution.

We have partnered with them and are offering a quick and easy application process to get started with funding your business.

Get to Building Your Funded Business

Raising capital for your dream business should be an attainable goal for anyone. With all the varied methods listed here, there’s something for every hopeful entrepreneur. There’s no need to wait around hoping to get the money you need. You can get started right now.

Of course, you also have other options for funding your online business ventures and understanding what that landscape looks like. To get a better picture of how to raise money for your online business or how to buy an online business, give our business analysts a call and they can walk you through your options.

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