Each startup is not only an innovative idea and a bright team, but also a thoughtful financial model that will support its growth and development. The further fate of the project depends on how to choose the right sources of financing at different stages of development. However, the issue of choosing a financing model is not always unequivocal and depends on many factors, such as market conditions, the company's development stage and affordable resources. In this article we will consider the most popular financial models of startups and help you understand which of them is best suited for your business.

1. Bootstrap: an independent path to success

Bootstrap is a financial model in which the startup is financed at the expense of the founders of the founders, without attracting foreign capital. This is one of the very first and most common ways to start a business that allows you to maintain complete independence.

Advantages Bootstrap:

• Independence: You do not depend on investors or external players and you can make decisions yourself.
• Full control: All income and losses remain at your disposal, which makes it possible to manage the business as flexible as possible.
• Preservation of a share in the company: You should not give part of your business in exchange for financing.

When to use bootstrap?

• In the earliest stages, when you need to start a prototype or test your idea.
• If you have sufficient resources to start a business or want to start with minimal investments.

However, this approach can be limited, especially when your business comes to the next stage and needs significant investments for expansion.

2. Venture financing: Expanding horizons

Venture financing is a process of attracting investments from venture capitalists, which usually invest in promising and fast -growing startups. This can be an ideal model if your project has a huge growth potential and you are ready to exchange part of the share in business for external funds.

Advantages of venture financing:

• Big funds: You get significant amounts for the development and scaling of business.
• Access to the contact network: Venture investors can offer not only money, but also valuable business relations, experience and examination.
• A chance to scaling: Investors can help you enter new markets and improve products.

When to use venture financing?

• When your startup already has a proven concept and you are ready to scale the business.
• If you want to quickly enter new markets or create a product that requires significant financial costs.

The disadvantage of this approach may be the loss of part of the control over the company, as well as the requirements for profit in the future, which can lead to tension in relations with investors.

3. Craudfunding: attracting public interest

Crowdfunding is a method of attracting funding from many people through specialized platforms. Unlike venture capital, crowdfunding allows you to receive funds from not one major investor, but from a whole group of interested parties.

Advantages of crowdfunding:

• Consumer feedback: Crowdfunding allows you to test the idea and get a response from potential customers before entering the market.
• Marketing support: A successful campaign can serve as an excellent advertising tool and draw attention to your project.
• No share in the company: In some cases, financing may be provided without the need to give a share in business.

When to use crowdfunding?

• When you have an interesting product or idea that can cause resonance in a wide audience.
• When you want to simultaneously draw attention to the product and get funds for its implementation.

The disadvantage of crowdfunding may be high competition on the platforms, as well as the need to develop a high -quality advertising campaign to attract investors.

4. Angel investors: support on the way to success

Angelian investors are private individuals who invest their own funds in startups at the very early stages of their development. Such investors can provide money, as well as useful tips and support.

Advantages of angelic investors:

• Flexibility: Angelic investors can offer more flexible conditions than venture capitalists.
• Contact network: Like venture investors, angelic investors can often offer useful business ties and tips.
• Less pressure: Unlike venture capitalists, angelic investors may not require such aggressive growth rates.

When to use angelic investors?

• In the early stages of development, when your idea needs initial capital for launch.
• If you are looking for support, not just money, and the experience of an investor is important to you.

5. State grants and subsidies: help at the start

In some countries and regions there is the possibility of obtaining state grants and subsidies for startups. These funds are often provided for the development of innovative technologies and social projects.

Advantages of state grants:

• Gratuitous funds: Unlike other models, such funds do not need to be returned or given a share in business.
• Early stages: Many grants are intended specifically for startups in need of starting capital.

When to use state grants?

• If your project is aimed at solving social or environmental problems.
• When you want to avoid debt obligations and maintain control over the company.

Conclusion

The choice of a suitable financial model for a startup is not only a matter of raising funds, but also strategic planning of the future growth of the company. Each model has its advantages and disadvantages, and it is important to choose exactly the one that will correspond to the current stage of the development of your project. Regardless of whether you choose Bootstrap, venture financing, crowdfunding or other options, it is important to remember that the correct choice of a financial model determines not only financial stability, but also the long -term business perspective. Given the unique features of your startup, a competently selected financing model will be the key to its successful development and scaling.