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more favorable than those offered by ‘traditional’ lenders. Angels often invest based on
their faith in the individual behind the idea as much as the potential viability of the business,
so a convincing pitch is very important when seeking this type of financing;

− Bank loan are still one of the best places to start when analyzing your venture’s funding
options. Borrowing money from the bank is perhaps more difficult than in the past, but it
is still likely that they will have a range of small business loans available to help you get
your startup or business idea off the ground. Banks want to be sure your business plan is
feasible and that you can tackle challenges should they arise. This means that you may be
considered riskier than more established businesses and thus have a harder time getting off
the ground if a bank loan is your only available funding method;

− Crowdfunding means seeking smaller amounts of money from a large number of individual
investors. Effectively you put together a compelling pitch explaining why the world will
be a better place if your idea comes to fruition and place this on a crowdfunding website.
There are three main types of crowdfunding:

o Equity crowdfunding - This involves investors obtaining a stake in your
business in return for their investment; as such it is the most closely aligned
to traditional venture capital funding;

o Rewards-based crowdfunding – With this type of crowdfunding, you can be

very creative, and build relationships with customers at the same time as
raising funds. In return for a donation towards your startup individuals are
offered a non-financial incentive. If you are marketing a specific product
then the incentive could be early access to the product, or an ‘early bird’
reduced price. Be careful to only offer realistic incentives that you are
confident you can deliver;

o Debt-based crowdfunding - Using this model the startup repays each
investor after a certain time at an agreed interest rate.

− Grants are a very appealing form of funding; as any money your business is offered does

not have to be repaid as long as you meet certain goals. The criteria for being awarded a
grant are likely to be strict and the vast majority of startups are more likely to be awarded
a small amount rather than enough to be able to fully fund your business for several years.
Grants are a good source of additional funding but shouldn’t be expected to cover 100% of

Project 2019-1-BG01-KA204_062299
The content of this material does not necessary reflect the official position of the European Union.