• September 23, 2013
1 minute Read
Newspapers and websites love high-tech startups. You know the story: this one secured angel funding; that one raised millions in venture capital funding. Statistically, however, they represent just a tiny fraction—a mere 0.4 percent—of the money used to start and grow companies.
That’s because high tech is a hot industry, with investors looking for the next Google or Amazon. These startups capture the lion’s share of the media’s attention because they raise huge sums of money and announce their fund-raising news.
So, what if you aren’t in high tech, and you have no angels?
As we discussed in our recent blog post, “Get Real, Get Funded,” it can be very difficult for startups to get funded since many organizations, including CAN Capital, don’t work with startups. We want to start you on the right track, though, by giving you a view into what entrepreneurs like you are doing.
Not surprisingly, many of your fellow small business owners dug into their own pockets, according to figures released in 2011 by the U.S. Census Bureau. Some 60 percent used their own savings.
Based on the 2007 Survey of Business Owners, Summaries of Findings, it seems a large number—20.8 percent—needed no money to launch their businesses.
Others got a bank loan (10 percent) or used a credit card (10 percent). Tapping friends and family savings was the route taken by 7.7 percent, while 5.6 percent took out a home equity loan.
Those who couldn’t get a bank loan, those without savings or friends to loan them money, or those with maxed out credit cards found a few ways to finance their businesses.
* A loan from federal, state, or local government
* A guaranteed government backed loan
Some reported using other sources of capital, which could mean they found a microloan or crowd-sourced funds, sold personal assets, secured seller or vendor financing, or borrowed against a 401K or life insurance policy.
Of the firms taking part in the U.S. Census survey, which includes only those needing money to start or acquire the business, 30.6 percent said they needed less than $5,000 for start-up capital. Only 1.5 percent needed $1 million or more to start or acquire their business.
Already up and running, and looking to expand? Visit www.cancapital.com to apply for the capital you need to grow.