How do entrepreneurs obtain financing? An evaluation of available options and how they fit into the current entrepreneurial ecosystem

摘要

Given the high visibility of venture capital and private equity (VC/PE) in business news, entrepreneurs may be misled on the role and relative size of this financing model. In reality however, VC/PE is quite difficult to obtain, particularly for young entrepreneurs. With this in mind, I assess seven popular models for financing that may be of interest to entrepreneurial students. These seven models include: self-funding/bootstrapping; friends, family, and colleagues; banks; accelerators; angel investors; peer-to-peer (P2P) lending; and crowdfunding. Each model is summarized and evaluated for their advantages and disadvantages. A discussion of relevant resources for each model is also provided.