7 Venture Capital Alternatives Worth Exploring
Running an up-and-coming small business is no easy feat. Long hours, lots of money, and maybe even sweat and tears are part of many new business ventures. Some small businesses turn to venture capital firms to secure the funding they need to grow.
If you are looking for venture capital alternatives, we’ve got you covered. We are going to review seven alternatives to venture capital for small businesses. Read on to learn more about these funding sources.
What Is Venture Capital?
Venture capital is a form of private equity and financing that investors provide to startups or other small businesses with high growth potential. Venture capital financing usually comes from wealthy investors, investment banks, or other financial institutions.
It is often in the form of money, however, it can also come in the form of technical or managerial expertise. Venture capitalists invest in small businesses that have shown great growth already or have prospects of growing exponentially.
Why Look for an Alternative to Venture Capital?
Why would a small business owner look for venture capital alternatives? One of the main reasons people stray away from venture capital firms is because, after the initial investment, investors usually get equity in the company. Along with equity comes a say in the company’s decision-making process.
If you don’t want to hand over power in business decision-making, check out our list of venture capital alternatives for small businesses below.
7 Venture Capital Alternatives for Small Businesses
Here are seven venture capital alternatives to consider for funding your small business venture. These alternatives to venture capital allow you to keep full equity in your business and control all financial decisions.
1. LendThrive
LendThrive is an online lender offering small business owners fixed rate loans up to $150K. LendThrive’s mission is to provide adequate funding to help small businesses in any industry grow and thrive.
2. Crowdfunding
Crowdfunding through a service like GoFundMe or Kickstarter is an alternative to venture capital worth considering. Many small businesses go this route, and while it may take longer to secure funds, it can be successful. Through crowdfunding, you can create a campaign to gain support for your small business from your community and beyond.
3. SBA Loans
The Small Business Administration of the United States offers different types of loans to small businesses. The most popular among the options is the SBA 7(a) loan. This loan can be used as working capital, fund an expansion, purchase supplies, and more. The downside is that these loans are in high demand so SBA loans applicants often get denied. The SBA loan processing time is also much longer than going through an online lender like LendThrive.
4. Microloans
If you only need a smaller loan amount, a microloan is a venture capital alternative that may be right for you. Microloans are loans smaller than $50K and can be used to buy inventory, hire new employees, or grow your business, among other things. These can be secured through the SBA microloan program or through a different lending institution.
5. Grants
Grants are another alternative to venture capital firms. Grants are typically from federal or state agencies — and occasionally private entities — and don’t require repayment. Small business owners can apply for grants from the SBA or on Gov.com. The Economic Development Administration is another source for state-level grants to consider.
6. Angel Investors
Angel investors or seed investors are high-net-worth private investors who back small businesses or entrepreneurs. This venture capitalist alternative is often seen as the opposite of a venture capitalist because the investor is more willing to invest in a friend’s business even without strong odds of return.
7. Loans from Family and Friends
The last venture capital alternative on our list is seeking assistance from family and friends. Often family members or friends with high-net-worths are willing to support the starting years of a small business. These people want to see you succeed in your venture and may be ready to invest early on.
These venture capital alternatives are all viable options to consider for your business. If you need funding quickly, LendThrive is an excellent funding source for small businesses seeking flexible terms and reasonable rates.
Fund Your Business With LendThrive
LendThrive, a member of the AVANA Family of Companies, wants to see your business grow. We are a venture capital alternative and can provide you with the funding you need. Our flexible fixed rate business loans are made for small business owners like you.
Use our loan calculator to see what you may qualify for and apply today! Get approved in as little as 24 hours and grow your business. Contact us for more information.
