Founder’s Guide to Raising Funds for your Early-Stage Startup

In order to attract investors, you must have a clear picture of your financial situation. You must determine the type of investment that will aid in your company’s growth. You must choose your funding source according to the nature of your business, the risks involved for investors, the pressure of repayment, the returns to investors, and their involvement in the decision-making process.

We’ve outlined a few financing options that can assist you in finding the best fit for your situation.

Guide to Fundraising for Startups – What is Startup Funding?

Funding for new businesses is defined as any type of capital that helps a new company get off the ground. Startup funding is the money needed to get a new business up and running. For product development, manufacturing, expansion, sales, and marketing, office space, and inventory; it is a financial investment in the company. A startup’s funding can take many forms, but there are three main types: self-funding, investors, and loans.

In order to begin the process of raising money for your cause, you must first do your homework, use your network, and think realistically about the amount of money you will need. Assess your startup costs and different types of funding sources to consider.

Understanding Funds and How They Work

A startup’s initial round of funding occurs so early in the process that it is not typically counted as part of subsequent funding rounds. Often referred to as “pre-seed” funding, this stage typically refers to the time when a company’s founders are just getting started. Pre-seed funding typically comes from the founders and their closest friends, supporters, and family members.

Best Resources for Startup Grant Funding

Several top resources stand out for US startup grant funding, especially federal programs like SBIR/STTR and specialized databases. These focus on innovation, underrepresented founders, and specific sectors without requiring repayment. Tailored to your equity and finance expertise, prioritize R&D-heavy grants aligning with relevant tech startups.

Federal Grants

• SBIR/STTR: Up to $2M for tech R&D (NSF, NIH, DOE, DoD)
• America’s Seed Fund: 1-month pitch response
• NIH: Biomedical focus
• DOE: Clean energy startups

Grant Databases

• Grants.gov: Federal listings
• SBA.gov: Partner programs
• GrantWatch/OpenGrants: Alerts & matching
• IFundWomen: Auto-notify women-led

Private/Niche Grants

• Amber Grant: $2,500 quarterly
• Freed Fellowship: $500–$2,500 monthly
• Kapor Capital/MBDA: Underrepresented founders
• Awesome Foundation: $1K community projects

Types of Startup Funding

When it comes to raising seed money, the possibilities are nearly endless. Here are some of the funding options for startups that we should examine in more detail.

• Venture Capital – Venture capitalists often target entrepreneurs and small enterprises with the potential for rapid expansion. It’s the venture capital firm’s goal to get a large return on their investment, either through a purchase of the business or an initial public offering (IPO).
• Angel Investors – Angel investors often wealthy individuals who invest their own money in early-stage companies, usually from a few thousand dollars up to around $1 million. They play a key role in filling the gap between friends-and-family funding and institutional capital. A major advantage is that angels can make independent decisions without needing approval from an investment committee, which allows for faster, more flexible deals. For very early-stage startups, this kind of capital and mentorship can be critical.
• Banks – Traditional loans are a form of debt financing rather than equity. They can be easier to access than venture capital if your business already has revenue, collateral, and a solid credit profile. Banks are generally more conservative than VCs and less willing to take on high risk, but a small business loan lets you raise money while retaining full ownership of your startup.
• Crowdfunding – Raising money through the efforts of a large number of people, such as friends, family, clients, and other investors is known as “crowdfunding”. With the use of social media and crowdfunding sites, this strategy taps into the pooled efforts of a huge number of people to gain more exposure and reach.
• Accelerators – There are startup accelerators that provide not only an initial investment (often $50,000 to a few hundred thousand dollars) but also help for firms as they begin to grow. Accelerators offer a wide range of assistance, from money to coaching to other sorts of support.
• Grants –  Grants from federal, state, and local governments, as well as private organizations, provide non-dilutive funding. Federal grants often offer larger amounts but are highly competitive and come with strict eligibility and reporting requirements. State and local grants are usually smaller but may be less competitive and more targeted to specific industries or regions. In some cases, federal and state programs coordinate to distribute funds earmarked for small business grants.
• Series Funding (Funding Rounds) – Equity funding is often raised in stages: Seed, Series A, Series B, Series C, and beyond. Founders raise progressively larger rounds as the company grows and hits milestones.
  • Seed Round – Typically, the first institutional round after angels and pre-seed. Investors look for a strong team, early traction, and a clear path to product–market fit. Check sizes often range from a few hundred thousand dollars up to a few million dollars, depending on the market.
  • Series A – Raised once there is evidence of product–market fit and repeatable growth. Rounds frequently range from around $2 million to $15 million, and venture capital firms are the primary investors.
  • Series B – Focused on scaling the business (hiring, marketing, new markets). Series B rounds are usually larger than Series A (often in the high single-digit millions or more), and valuations reflect demonstrated traction.
  • Series C and Beyond (D, E, etc.) – Later-stage rounds fund major expansion, acquisitions, or IPO preparation. These startups are often valued in the tens or hundreds of millions of dollars. Round sizes and valuations vary widely, and only a small percentage of companies reach these stages.

Comparison of Startup Funding Types

Pros and Cons of Startup Funding

Before you go ahead and get into securing funding, there are a few things you should consider. There are some pros and cons to getting funding to your startup. Go through them first before making the decision of seeking help from investors or VCs.

How Founders Raise Funds Successfully?

A company’s ability to raise money is heavily dependent on the nature and type of its business.

Here are some of the options you have.

• Bootstrap First – Use personal savings or friends/family for early progress. Low cost, full control, flexible terms,no formalities needed.
• Time It Right – Raise for clear milestones (e.g., product launch, revenue targets). Investors back opportunities, not cash crunches. Match with favorable markets.
• Target the Right Investors – Research thoroughly: stage fit, sector expertise, check size. Prioritize those offering strategic value beyond cash; they’ll stick through ups/downs.
• Build Your Plan – Treat fundraising as a process. Map investor outreach, track progress, and prepare for diligence.
• Leverage Programs – Incubators nurture idea-stage startups in the long term; accelerators inject $50K–$250K in funding and mentorship for rapid scaling (e.g., Y Combinator Demo Days).
• Network – Partnerships and warm intros cut rejection risk 50%+. Engage peers, alumni, and LinkedIn.
• Perfect Your Pitch – Customize 3-5 key slides per investor: problem, solution, traction, ask. Research their portfolio first.

Get a Business Valuation to Increase Your Chances of Securing Funds!

With all of these options, it’s clear that there’s a ton of money to be had in the startup world. For each entrepreneur, it’s essential to determine which type of funding is best suited to their company’s goals and needs. A big help to securing funding for your startup is getting a business valuation. With a business valuation, you can attract more investors and better funding for your startup. Eqvista can help you secure a fully-customized business valuation done by certified professionals. Get in touch with us to learn more about our valuation services!