Funding for Different Types of Business
Venture capital: Venture capital firms want repeat entrepreneurs. They want plans with huge growth rates, in high-growth industries – usually high tech as well as high growth.
Angel investors: This group includes thousands of individual investors, investment clubs, local investment groups, and others. Angel investors will also sometimes accept less ownership than venture capitalists, in some cases as little as 5-10%.
Commercial bank loans: Bank loan businesses money for working capital and even occasionally for expansion, but not without solid collateral. If you don’t have solid collateral, or if you aren’t willing to risk what you have, then don’t expect to get commercial loan financing.
Friends and family: Many businesses start with financing from friends and family. This is sometimes the only way to start a business, but it is also full of potential problems. Go very slowly.
Self financed: Many businesses start without loans or investment, and many more businesses do their business plans without needing outside financing.
(Jailani M. Nor, 2014)