The truth about startup funding

Lesson Details:

This course is brought to you by Appy Pie as part of our academy series in the last video I explained how using lean principles can help you start a business with little or no money up front now there are still a lot of people that think that their idea is different and they need outside funding in order to start a business and I wanted to explain about where small businesses get funding when they need it now here are the five most common sources of funding and their rank from the most common at the top to the least common at the bottom so the most common source of outside funding for small businesses is personal savings from the business owner and that's how fifty percent of small businesses are funded the next most common is credit cards and after credit cards comes friends and family then after friends and family comes banks and if that small business owner still needs more money then they usually turn to venture capital and the reason why I think this is really interesting is a lot of people think that they need to get money from a venture capital in order to have a business but the truth is less than 1% of small businesses actually get funding from a venture capitalist and many businesses that are in a position where they could get funding from a venture capital avoid it because they don't want to lose that much equity in their company now there's a great video on YouTube that I highly recommend you watch it's called the Kauffman Sketchbook Money game and I'll include a link in the description but it's a short three minute video that visually explains how small business owners receive their funding it's really interesting to watch and it will change your mindset