James River Capital’s 6 Places or Strategies to Find Startup Capital

Paul Saunders, CEO and co-founder of James River Capital in Richmond, Virginia, recognizes funding as your primary new-business challenge. These, according to Saunders, are the logical starting points or strategies for finding the start-up capital you need.

Bootstrapping — Use your savings or borrow from family or friends. That money might be hard to come by, but if you can access this valuable resource you might maintain more control of your business and avoid high interest repayments.

Business loans from a bank — This can be quite a challenge for new business owners, but you should certainly at least try — especially if you have excellent credit. Start with banks or lending institutions where you have car or home loans or have already established a good reputation as a borrower.

Angel investors — These people are trying to park their money where they expect to make a decent return. The upside is that they don’t generally expect to be closely involved with your company. You might find such investors in your own social circle or by networking in your community.

Community-based loans — Regional development agencies and similar sources want to lend money to companies that might end up employing locals and contributing to the tax base. One source for contacts in this area is your local chamber of commerce.

Venture capitalists — Venture capital firms or individuals might have millions to lend, but they’ll first study your concept and your existing business with a fine-tooth comb. You must also expect to give up a degree of control to a VC. The upside, of course, is that you’ll have all of your immediate funding needs met. You’ll also have more credibility with clients and other business contacts. After all, these folks know what they’re doing.


Crowdsourcing — Check out websites such as Kickstarter, Indiegogo and Patreon, among others. Entrepreneurs like you can post your proposal and funding needs, and perhaps draw the attention of dozens, hundreds or even thousands of small investors each willing to contribute ten or twenty dollars to your cause. The advantage is that you don’t have to pay the money back, so you have no steep interest rates affecting your bottom line. First study your favorite crowdsourcing sites and see what works and what doesn’t.  

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