“Multiple alternative funding options for early-stage founders: think BEYOND banks & traditional VCs” 

“The secret of change is to focus all your energy not on fighting the old but on building the new.” — Socrates

I start with a philosopher because I fundamentally am a philosopher myself. Having had the luck to study ancient Greek, I try to use it in my daily decision-making, the critical decisions especially. In my role, as the Founding Director for Emory University’s Goizueta “Center for Entrepreneurship & Innovation”, I interact with -and advise-  hundreds of early-stage founders. As a woman, I especially have a particular passion for helping other female-identifying founders.

As I read the recently published LP2X 2021 Annual Report and State of Women’s Entrepreneurship Report, I was reminded of how much more there is to do in providing an equal playing field for women in the entrepreneurship arena. Christy Brown notes that: “though the number of female-led businesses has steadily grown over the past decade, women remain critically underrepresented and underfunded in the global entrepreneurial landscape.”

The traditional routes to fund female founders are abysmal: despite the staggering growth of VC funding, female founders saw only 2.2% of that funding – down from 2.5% in 2016 and 2.3% in 2020, according to Crunchbase data.

These numbers, which are similar for all other under-represented founders, have prompted a series of recent conversations around what IS possible, and what are alternate routes to financing good businesses founded by females – and BIPOC founders.

The truth is loans, credit cards, and traditional investors are NOT your only option. 

In fact, looking at funding the business in the same way we look at investing personally, with a balanced portfolio approach, is a healthy approach, so as to diversify the sources of funding. Revenue comes first. Then, a range of equity and non-equity-based funds may be the route to growing a business and keeping relative control of it. 

If our goal is to accelerate the change, there are many other options to flip the equilibrium.  Let’s find ways to work AROUND the venture.  One of those is merely to grow by revenue but in the case you need to scale faster, I dig into deeper options below.”

Let’s dig deeper. I am sorting out two macro-categories, based on whether you have to give away a part of your company or not.


  1. Angel investors – this is a great overview of angel Investing. It is extremely hard to find these investors, however, there are angel networks now specifically setting aside opportunities for female founders. In Atlanta, for example, Atlanta Technology Angels and TiE Angels which have an allocation of funding focused solely on funding females
  2. Niche VC (by industry, demographic, geography, or gender, such as women) – I specifically call out “niche” because traditional VCs imho are not quite “alternative”: if you are a female founder, the odds of you getting financing from traditional VCs are close to null (see above: 2.2%).  These niche VCs target specific classes of diversity and fund solely to them and the best part – the partners and investors in these VCs are traditionally part of these groupings. 
  3. Accelerator/Incubator funding – funding can come in the form of seed money (tens to hundred thousands) but also in value (what you might have had to pay for out of pocket) such as legal counsel, shared services, expert mentors, consulting services. Most of the Accelerator and Incubators that provide funding also receive equity in the company itself.  It is a caution to ensure you are aware of the dilution in these scenarios. Many times founders trade significant sums of equity as in a traditional VC model.

NON-equity based

  1. Community development finance institutions (CDFIs): there are many of these across the country, and odds are you have many in your area too.
  2. Revenue-based financing (RBF): the startup sells a percentage (1% to 3%) of its future revenue to an investor until a certain multiple is reached (3-5X the amount invested).  This is similar to Asset Based Lending below but buyer beware, this can be a significant debt load with APR’s accruing daily if the debt to receivables is not cleared timely.  This can impact both revenue and margin of a  young company. 
  3. Asset-based lending (ABL): this uses assets (such as accounts receivable, inventory, machinery, equipment, real estate) as collateral
  4. Opportunity Zone funding – There are about 8,700 QOZs (qualified opportunity zones) in the U.S., and you are likely to live in -or close to- not one, but many. Here’s a convenient opportunity zones mapping tool.
  5. Small Business Grants – this is a form of financial assistance awarded (NOT borrowed) by the federal, state, or local government. They are competitive and hard to navigate. Consider starting from resources like NAV and the National Association for the Self-Employed 
  6. Fintech platforms – a whole new generation of online startups in financial technology, with lower barriers to entry, are emerging as an alternative way to finance your business, as they offer small loans, credit options, and more. Examples are Kabbage and PayPal
  7. Crowdfunding – raising funds from a large group that make a small investment
  8. Peer-to-peer (P2P) funding – this allows people to borrow from each other, in a sort of crowdfunding-angel investment model. Examples include LendingClub, Prosper, Upstart, Funding Circle
  9. Pitch competitions – this is not something you can fully rely on, but surprisingly there is good money to be obtained especially if you “do the circuit” of competitions. If you are in college, there are many competitions open to students only.
  10. Alternative crowd-vesting – [WeFunder, Republic, etc…]

As you can see, as long as you have an entrepreneurial DNA, you don’t have to rely solely on traditional funding options: alternative means of funding are extraordinary and very available!