There are many ways to fund your company at an early-stage.
- Self-funding
- Moonlighting and consulting
- Bootstrapping
- Family and Friends / Angels
- Micro-Equity and Micro-Loans
- Personally secured bank loans
- Factoring and supplier financing
- Government programs
Virtual company is a company that has no offices, very few employees loaded with associated costs and benefits, no communication costs, low legal costs and so forth. A virtual company will use providers like Skype for video conferencing, BaseCamp for project tea and document management, ADP for payroll and tax management, online basic legal documents for protection, and Salesforce.com for sales tracking.
Bootstrapping is a type of self-funding often applied in a small business, can reduce costs from the current operation and overhead. It is usually overlooked as a source to business owners. The process of analyzing the operation to save and improve efficiencies will also allow the entrepreneur to learn more about the company.
- no or low rent
- bartering for goods
- trading intellectual property rights
- renting or leasing equipment
- used equipment
- access to expensive equipment
- suppliers’ and customers’ help
- cooperative purchases
- outsourcing
- credit cards
- contingent litigation
It is important for closely held companies and early stage high-growth companies seeking equity investors because it is reserve most of ownership to the starters themselves.
There are private lenders that provide funds for operations using purchase orders as security for the loan and we called this by factoring of purchase order.
Suppliers can give you a line of credit, in exchange for getting your purchase orders to help you providing working capital.