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12 Creative Ways to Fund Your Startup

Your Guide to (Creative and Non-Traditional Ways) to Finance Your Startup.

Creative Ways to Raise Money for Your Startup

So you are an entrepreneur.

First -- congrats on making the leap.

Second --- you may have heard of Paul Graham's Startup Curve.

If you are reading this, you are likely past the point of initial exuberance and rapidly descending into the trough of sorrow, as you are contemplating,

“How Am I Going to Fund This”

Despair no more!

This article is your guide on navigating the tough funding waters (or hopefully at least will serve as a point of inspiration for out-of-the box fundraising.)

A Quick Airbnb Story

Let me start with a quick story…

Many of you might be familiar with Brian Chesky and Joe Gebbla, the founders of Airbnb.

Well, something you might not know - after a year in the trough of sorrow the pair was collectively $40,000 in credit card debt

To keep the business alive, they sold more than $30,000 worth of themed cereal.

That is right, themed cereal.

“Obama O's, the Cereal of Change,” and “Cap’n McCain's, a Maverick in Every Box.”

Chesky and Gebbla were both designers from the Rhode Island School of Design. They designed the box artwork themselves and managed to cheaply print the images on each box.

Maybe, you just need to go in a little credit card debt (say 40k or so) to get those creativity juices flowing.

***Just for the record, this is not legal advice***

But, if you want to read more about their story you can here.

Personal Credit

I know boring . . .

But friends, family, and personal savings and credit should be your first source of finance for your startup.

Why? Not for the reason above

The real reason…

If you are not willing to buy in – Why should anyone else?

To start The Founder’s Attorney I got a bit creative and took out a Bar Study loan. There are several private companies that provide loans that subsidize law students while studying for the bar.

I also used my own personal, and business credit cards.

Be wary though, as everyone knows, credit cards and personal loans come at a high interest rate (>20%). This is not a solution forever, but can potentially work for a short period.

You can also take out a loan on your home.

Creative Financing - Home Loan

I didn’t have that option since I live in Southern California and I am a Millennial.

Meaning I will be renting for the rest of my life...

Borrow Against Life Insurance

This one also didn’t really apply to me...

But if you insured your life with a whole life policy more than 3 years ago this may be a creative source of cash.

What does this mean?

If you have owned a whole life insurance policy for more than 3 years - it has a cash value.

Read the fine print of you life insurance policy and you may be able to borrow against it.

Contact your insurance professional for details on how borrowing against life insurance works.

What is the Difference Between an Incubator and an Accelerator?