5 Best Startup Funding Sources in 2022

Starting a business is always an exciting adventure, but it can also bring about a lot of stress and frustration as you scramble and search for effective ways to get everything off the ground. And while that’s always been true, things have become even more difficult due to the global COVID-19 pandemic wreaking economic havoc over the past two years. That said, there’s no reason to lose hope or give up on your startup dreams just yet. There are several ways for new businesses to earn some quality funding despite the current struggles in the world! 

Please continue to explore five of the best startup funding opportunities available to you and your business, and also consider browsing through the top-quality services and comprehensively written educational articles provided by our experts here at TaxRobot for even more information. 

Related: Startups Can Get $250,000 From The IRS: Here’s How

What are Some of the Basic Startup Funding Sources?

We’ll delve into some of the more specific startup funding sources in the section below. But first, let’s take a moment to explain some of the more basic, overarching, and commonly used funding sources that new businesses can rely on to help get themselves going during the early stages. These funding sources typically include;

  1. Debt-free funding: This option involves alternative funding sources for startups that may be available- and very worthwhile- depending on your business’s unique situation. 
  2. Business loans: Debt financing in the form of business loans can give startups access to capital without diluting the ownership of their business. 
  3. Business credit cards: These cards allow business startups to leverage the personal credit history of their owners to access quality amounts of funding.

5 of the Best Startup Funding Options You Need to Explore

Now that we’ve covered three of the more basic umbrella types of funding options that startups can rely on to help get themselves going, let’s explore five of the best startup funding options available to new businesses in greater detail.

Related: How to Qualify and Claim the R&D Tax Credit

Venture Capital

Wouldn’t it be excellent for a new startup business owner to secure a source of decent financing without taking on a mountain of debt at the start of their business journey? Thankfully, venture capital (VC) can allow startup owners to do just that! Venture capital is a specific form of equity financing that can be a fantastic solution to help get new businesses off the ground, especially if they’re operating within a particular industry, like tech. For this type of funding, interested investors- usually investment banks or other financial institutions- provide financing to startups that they believe have the potential for substantial long-term growth.

Personal Loans for Business

Entrepreneurs with strong personal credit and quality business ideas have the option of putting their own finances on the line to get their startups moving on a path towards success by taking out a personal loan for business. This financing option comes with a wide range of advantages, including no hidden fees or tricky formulas. They also tend to carry significantly lower interest rates and have easier to manage repayment terms than traditional business loans. In short, they’re just a personal loan that can help a budding business move forward towards a bright and financially successful future.

Are you searching for a top-quality, effective, and easy-to-use system to help you automate your R&D tax credit this year? Try exploring our expert services here at TaxRobot today to start earning better refunds and audit-proofing your tax paperwork for value-based pricing you won’t get anywhere else. 

Angel Investors

Angel investors, also commonly known as private or seed investors, are another excellent funding source for new startups. Unlike venture capital, angel investments are typically given by wealthy individuals who offer small businesses and startups working capital in exchange for ownership equity in the company. New business owners usually seek out angel investment in the early growth stages of their business. And though angel investors don’t typically invest as much as venture capitalists do, their contributions are still a significant boon for up-and-coming companies looking for ways to get traction in the market.   

Equipment Financing

Startups often need funding to purchase essential equipment, so equipment financing can be a great starting point to get the money they need to open for business. Working with equipment financing companies is a highly beneficial option for startups due to its self-assured nature because the purchased equipment will then act as collateral for the funding used to buy it. This means that additional equipment loans will be much easier to qualify for in the future. That said, many equipment lenders have minimum requirements for the amount of time a business will need to have been in operation before they’ll offer their financing. That isn’t the case for all lenders, though, so you’ll want to conduct research for more information.

Related: R&D Credits for Software Companies: What to Know

Crowdfunding

Taking advantage of quality crowdfunding platforms like IndieGoGo and Kickstarter can be a great way to start earning capital for your startup business. Though it may not produce as much as some of the other options included on this list, it can still be a fantastic place to get started. After all, every little bit of capital you earn is one step towards building up a successful business! Setting up a quality crowdfunding campaign is also a great way to gain some exposure for your budding business while seeking other forms of capital.

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Considerations to Keep in Mind

Now that you have a more thorough understanding of some of the best financial options available to you for your startup, you can better navigate the beginnings of your business’s financial future to help get the ball rolling! For more information on how your startup can get funding and access to quality tools to help increase your tax returns this year, please consider exploring our expert services provided here at TaxRobot today.

Are you searching for a fast, practical, and cost-effective way to help audit-proof your tax paperwork this year while automating your R&D tax credit for bigger, better returns? Get started with our help at TaxRobot today to take advantage of our top-quality services offered at value-based pricing that you won’t find anywhere else.

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