Bootstrapping is a great startup strategy, but for some companies, bootstrapping isn’t the right answer—or maybe it was the right answer, in the early-stages, but you’ve outgrown that phase and are now in need of greater capital.

Many entrepreneurs are black and white when it comes to capital: it’s either bootstrap or pursue VC funding. But this is a close-minded view. Sure, these are both great options, but they are not your only options.

Depending on your industry, your goals, your savings, your stomach for risk, and countless other factors, you might decide to go in one direction or another. In between, there are countless other options on the funding spectrum.

When you’re ready for additional capital, before you jump to VC, first consider the downside. There are risks to taking venture capital: your company may not see a significant return for many years (especially for certain industries and/or products) and your VC firm could fail before you achieve your goal return. Fundraising takes up a lot of time—time spent away from developing your products, chasing leads, and growing your customer base. And of course there are also the very obvious risks of dilution and loss of company control.

If VC is still the best choice for your company, then go for it! But for those companies who don’t want VC funding, for whatever reason, there are many alternatives for capital:

1. Friends and Family

Tapping into your close support system is an obvious first step for fundraising. While this is a very common and effective first step, beware of some of the issues associated with a friends and family round. First, it’s unlikely that your friends and family have pockets as deep as a VC firm so the amount of funds you are going to be able to raise are limited. You may need to raise small amounts of capital from a large number of people which can be somewhat hard to manage. Also, it can be a bit uncomfortable borrowing money from friends and family who are, generally speaking, unsophisticated investors. To avoid unnecessary awkwardness, be upfront and completely transparent about the risks of investment—and don’t accept any money that your friends and family can’t afford to lose.

2. Angel Money. 

There are other sources for seed money outside of your friends and family. Countless professional angel firms that can also be viable options for early-stage companies.

3. Loans

If your company is already generating some revenue, you may qualify for a loan. This can be a good option if you qualify. Unfortunately banks aren’t into taking great risks with their funds so if you don’t yet have steady revenue, you may not qualify. But banks aren’t the only place to get a loan; you may also qualify for a loan from a venture debt fund or other finance company.

4. Credit

Using your credit line to get the capital your company needs is pretty easily done if you simply charge away! The downside is that your personal credit can take a hit if your company doesn’t perform as expected and you can’t pay back the funds on time. If you can stomach it, the low returns demanded by your credit card can be pretty tempting. And know that you’re in good company: You certainly won’t be the first company to use credit to grow your company.

5. Crowdfunding

While you may never be a crazy Kickstarter success story, the growing trend of crowdfunding can still work for you. What’s great about crowdfunding is that it forces you to build your brand and, subsequently, builds your customer base, right from the get go. As your funds are growing, so is your exposure. Crowdfunding isn’t the answer for everyone, but it is an interesting road to explore.

6. Strategic Partners. It might be worth your time to seek out businesses with which you could create a strong partnership—they may even be interested in a potential future M&A option. This might be a business that sells a complementary product or service to your offerings or in other ways offers something that could be considered added value to your business. Additional capital can be found in this synergy.

7. Government grants. Granted this is only a real funding option for non-profit organizations, but it’s a great option. There are many grants available for entrepreneurs. The SBA site can be a good place to start your search for available government funds.

I offer this list of funding alternatives not to say that these are your only options, but to give you a clearer perspective on funding. In other words: VC is only one of many funding options available to you. There’s nothing wrong with VC, of course, but pursuing other funding options can be a strategic move for both growing your business and strengthening your negotiating position if and when you decide that VC is what you do need. Start by clarifying your company goals and your capital needs. From here you can decide what road to go down to achieve your goals.

“Ten years ago most people here did not know what this brown paste was,” says Anthony Brahimsha of the chickpea dip that is now nearly ubiquitous on menus in the U.S..

Born to Syrian parents, Brahimsha knew that hummus in the Middle East is much better than that found in American grocery stores. With the help of Mike McCloskey, owner of Select Milk Producers, the sixth largest dairy cooperative in the country, he developed a hummus called Prommus that is higher in protein –– three times that of other dips. It preserves the traditional flavor by using cold pressure, rather than heat, in the kitchen.

“What Halo Top is to ice cream and Chobani is to yogurt, we are to hummus,” Brahimsha says, by way of explaining that Prommus is also changing the industry.

The company name is a combination of the words “protein” and “hummus,” but is also a play on the word “promise.” With 1 percent of sales benefitting the World Food Program to fight global hunger, Brahimsha hopes that the product can have a significant effect on ending hunger and making nutritious foods available wherever they are needed.

Prommus cofounder Anthony Brahimsha, who has spent a lot of time on humanitarian missions, believes his hummus could help feed the world.

While the initial idea was born out of his humanitarian work in refugee camps along the Turkish/Syrian border, Brahimsha has even bigger dreams. The world needs to find more ways to make nutritious foods for people who are going hungry, and he thinks Prommus and its innovative production process are part of the solution. Two patents are currently pending.

The company’s four varieties (original, red pepper, olive, and avocado) are sold in the Midwest, primarily in Illinois and Michigan. These flavors were taste-tested by Brahimsha’s fellow members at Chicago’s WeWork River North, a community that he says has been invaluable to the startup.

“There are a lot of co-working spaces, but not everywhere is a community of social entrepreneurs who are rooting for their peers,” he says.

A winner in the business venture category at the Nashville Creator Awards, he says he’ll be able to start the next stage of expansion for his company, primarily by adding staff.

“As soon as you win this award, all the blood sweat and tears that you put into the company comes together,” he says. “Everything that you have been doing, the people that were with you along the way, finally, it feels like an affirmation that you were doing the right thing.”

 

Melanie Faye grew up in Nashville, but she doesn’t credit Music City with her success. She credits Guitar Hero. Yes, that Guitar Hero, the video game that allows players to mimic the sounds and moves of their favorite stars. For Faye, it was Michael Jackson.

“I don’t think growing up in Nashville introduced me to guitar players,” Faye says. “My parents were chemists. I was not able to go to bars and see local shows. Guitar Hero introduced me to all this music I was not exposed to. Guitar Hero looked really cool. It made me feel empowered.”

So, perhaps it shouldn’t be a surprise that Faye, now 20, has found fame via YouTube. After dropping out of college three semesters in to pursue her music career, Faye posted videos of herself sitting in her bedroom and playing covers of John Mayer and Mariah Carey.

“Guitar Hero introduced me to all this music I was not exposed to,” says Melanie Faye. “Guitar Hero looked really cool. It made me feel empowered.”

She also used the platform to debut some of her original work, which she describes as a mixture of R&B, hip hop, and pop. Her voice, serious guitar-playing chops, and friendly demeanor propelled those videos to more than 10 million views. She was so popular that the guitar company Fender tapped her to demo a new line of the instrument.

“I thought, ‘This is it! I’m viral. I made it!’ But it does not work that way,” she says. Faye makes ends meet by working at a local doughnut shop and teaches guitar. She also keeps working on her music the old-fashioned way, having been tapped to be the opening act for musicians like Noname and Mac Demarco. Her most recent gig was at the Nashville Creator Awards.

She is working on her first album, which she hopes will be out by the year’s end. A self-proclaimed perfectionist, Faye has been working on Homophone for years.

“If I had known it was going to take this long,” she says, “I wouldn’t have told people it was going to be out soon.”

Faye is also working to relieve the jitters that come with performing live, rather than in front of a camera. A recent show at the Hollywood Palladium was a game changer.

“I typically am really shy and inhibited on stage. But I felt so much support and positive energy, I just let loose,” she remembers. “I think to an extent you just have to have fake confidence at first. I walked up and had a confident demeanor and once I heard crowd cheering, then I was confident.”

“It happens overnight,” Maria Vertkin says. “An immigrant moves to the U.S. and goes from being a surgeon to washing toilets.”

College degrees and professional experience from their home country don’t always mean as much as they should when an immigrant starts a new life abroad, says Vertkin. She knows from experience: She spent her childhood in Russia and Israel before immigrating to the United States. But she realized that they have one thing that will always be of use to them: their language skills.

“It doesn’t make sense if you have something as valuable as a second language to not use it,” says Vertkin, who speaks English, Russian, Hebrew, Spanish, and Portuguese.

Vertkin, a Boston-based social worker, wanted to help train women to use their multilingual skills to their advantage. She saw a need that they could fill in the medical field. Hospitals in Massachusetts struggled to find interpreters for their patients who aren’t native English speakers. Without interpreters, expensive and even potentially fatal medical errors are possible.

A Found in Translation graduate shows off her diploma.

“The jobs are plentiful and the demographics are shifting,” says Vertkin. “Not only do they serve the local population, but medical tourists come from other countries and they need interpreters.”

The idea was a hit with the judges of WeWork’s Nashville Creator Awards. Found in Translation took home a $72,000 prize in the nonprofit category.

In 2011, Vertkin started Found in Translation to help homeless and low-income women achieve economic security by making their language skills an asset, rather than a liability. Within a few weeks of announcing the first class, she had 200 applications.

The nonprofit offers medical interpreter certificate training as well as other interpreter programs. And the training includes more than the core curriculum — childcare, transportation, job placement, and access to mentors for professional development are also part of the program.

The 186 graduates of Found in Translation classes between 2012 and 2017 earned approximately $1.86 million cumulatively more per year than they did before enrollment. That’s about $10,000 more per person annually. She says that if she wins in the nonprofit category at the Nashville Creator Awards, she can expand the program.

Classes currently take place in Boston, where Vertkin estimates they could easily double in size with the right funding. Every city in the U.S., she says, has the potential for success with Found in Translation.

“There is opportunity and need and we are connecting them,” Vertkin says. “The biggest risk is for employers not hiring multilingual employees.”

If Janett Liriano has her way, you won’t be using your FitBit much longer.

Liriano is CEO of Loomia, a New York-based firm at the intersection of tech and fashion. The company creates “intelligent drapeable circuits” that are soft enough to be embedded into textiles and can be safely washed and dried. Instead of wearing a step tracker on your wrist, it could be embedded into your running shoes.

That’s just the beginning of what these circuits can do. Those shoes might not just track your steps, but can also measure the pressure on your feet, giving you information on how you should adjust your gait. They might heat up and keep your feet warm in winter. And a light might keep you safer on a nighttime jog.

Loomia’s CEO Janett Liriano and founder Maddy Maxey

Liriano has two patents for her product and others in the pipeline for the smart fabric-enabling circuits. Her team is working with more than 80 brands on how they can integrate the smart technology into their designs. The current emphasis is on clothing, but the flexibility of the circuit opens the door to other products in the future.

“We are category agnostic,” Liriano says. “If you can make a washable circuit, you can put it on the floor. You can put it in wallpaper.”

Liriano, who took home third place in the business ventures category at the Nashville Creator Awards, sees potential in fields ranging from medicine to transportation.

Not only can Loomia transform the ways smart devices are used, it can also change what happens to all that data once it is collected. The company is looking at ways that consumers can sell their data to interested parties — or choose not to share it.

Liriano, a “born-and-bred New Yorker,” thinks the city is the right place for the firm. It’s one of the country’s great fashion hubs, but it also has a strong startup scene.

New Yorkers are inherently scrappy and resourceful,” she says. “For a business that is not super capitalized, that’s a good network. We are hard-core hustlers.”