Five Ways to Raise Money for the Creation of Your Startup

Technology Trends

Millions of business ideas emerge every second all over the world. Ideas that can revolutionize people’s lives, social structures, and even the economy. Unfortunately, most of them are forgotten due to lack of support and, above all, lack of money. The funding of a business is one of the most critical assignments and, at the same time, one of the most problematic.

If you have a powerful idea, stand up and fight for it. This includes its validation, business model development, and of course, obtaining capital to fund it. Building a solid and profitable startup is not an easy task; it requires hard work and discipline to generate operating formats and administrative processes according to the needs of today’s consumers.

Several funding sources are available for new entrepreneurs, from access to financial products such as an ITIN loan to out-of-the-box alternatives such as crowdfunding. Here are some options to consider when raising capital to establish a successful business.

1. Personal Savings

According to JPMorgan Chase & Co, 70% of Latino-owned businesses are financed with personal savings. It is undoubtedly a practical option, but it prevents companies from generating a good credit history, a fundamental aspect of the growth of any business.

Using personal savings to fund a startup is often the easiest and most straightforward option. It allows you to invest in your own business without having to rely on external sources of funding. However, there are some downsides to this approach. Firstly, it can be risky as you are putting all of your own money at stake. Secondly, it prevents you from building a credit history, which can be detrimental in the long run when seeking additional funding.

2. Friends and Family Loans

This alternative is also widely used since, in most cases, they do not charge interest rates, or if they do exist, they are minimal. It is essential to consider that mixing business and family can bring problems in the future.

Borrowing money from friends and family is another option to consider when seeking funding for your startup. It is often an attractive option as you can usually get the money at a lower interest rate than you would from a bank. However, this approach can also have its downsides. If the business does not go as planned, it can lead to tension and strained relationships with friends and family.

3. Credits and Loans

Using these financial products allows you to set the course of the venture according to your criteria. It is vital to analyze the options in the market until you find the one that fits your needs and payment possibilities.

If personal savings and loans from friends and family are not an option, you can consider traditional forms of financing such as bank loans or lines of credit. These are often the most popular ways of funding a startup. They are widely available and can offer competitive interest rates. However, they can be challenging to obtain, particularly if you do not have an established credit history or collateral to secure the loan.

4. Angel Investors

These are people who invest in companies in exchange for convertible debt or ownership of a part of the company. This type of alternative can enhance the organization since they usually have significant experience and vision of the business world.

Angel investors are high-net-worth individuals who are looking to invest in promising startups in exchange for a percentage of ownership in the company. They can bring a wealth of experience, knowledge, and contacts to the table and can help to open doors that would otherwise be closed. However, they are also notoriously difficult to find, and you will need to be able to present a compelling business plan to secure their investment.

Angel investors typically have a lot of experience in the business world, and they can provide valuable advice and mentorship to entrepreneurs. They can also introduce entrepreneurs to other investors, industry experts, and potential partners.

To attract angel investors, startups need to have a strong business plan and a clear strategy for growth. They need to be able to demonstrate that they have a unique product or service that addresses a significant market need. They also need to be able to show that they have a capable and experienced management team.

5. Crowdfunding

Crowdfunding is a relatively new method of raising money for startups, and it has become increasingly popular in recent years. Crowdfunding platforms, such as Kickstarter and Indiegogo, allow entrepreneurs to raise money from a large number of people, often in small amounts.

Crowdfunding can be an effective way to raise money for startups that have a strong social or environmental mission. It can also be a useful tool for testing the market for a new product or service. Crowdfunding backers often get access to early versions of products or other exclusive rewards, which can help build a community of early adopters.

To be successful at crowdfunding, startups need to have a compelling story and a strong online presence. They also need to be able to demonstrate that they have a clear plan for how they will use the funds they raise.

6. ITIN Loans

ITIN loans are a type of financing that is specifically designed for immigrants who do not have a social security number. These loans are offered by online lenders and require the borrower to have an Individual Taxpayer Identification Number (ITIN).

ITIN loans can be a useful tool for immigrant entrepreneurs who are looking to start a business in the United States. They can be used to finance the purchase of equipment or inventory, to cover operating expenses, or to provide working capital.

To qualify for an ITIN loan, borrowers need to have a business bank account and to be registered with their local authority as a doing business as (DBA) entity. They also need to be able to demonstrate that they have a viable business plan and a clear path to profitability.



Raising money for a startup is one of the most critical tasks for any entrepreneur. It requires a clear strategy, hard work, and discipline. Fortunately, there are many funding sources available to new entrepreneurs, from personal savings to crowdfunding and ITIN loans.

To be successful at raising money for a startup, entrepreneurs need to have a strong business plan, a clear strategy for growth, and a capable management team. They also need to be able to demonstrate that they have a unique product or service that addresses a significant market need. By taking advantage of these funding sources and building a solid business, entrepreneurs can turn their ideas into successful startups that make a difference in their communities and the world.