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Startup success is not only driven by the availability of capital but also depends largely on the quality of support they receive from backers. Fintech visionaries, such as Paul Graham—Co-founder of Y Combinator for alternatives to conventional funding models (banks)—– and Oleg Boyko – head of international private equity firm Finstar Financial Group—– support Fintech companies by being a strategic partner with years of industry expertise and insights that can be leaned on and leveraged for guidance in a complex and competitive marketplace to achieve long-term future success.

However, the survival of a startup in this highly competitive market, largely, depends on finding the right source of capital. In certain instances, banks can be a good option as they take more of a back seat approach. But a growing number of startups are turning to peer-to-peer lending and alternative means of funding, for a deeper level of support than just purely a cash injection. Let’s take a look at some of the options currently available for new business ventures.

Options for new business ventures

  • Bootstrapping
  • Alternative business funding
  • Crowdfunding
  • Peer-to-peer lending
  • Government programs


Starting a new business on a constrained budget without investor capital is called bootstrapping, and it makes sense if you don’t want to spend months on investment pitch preparation and courting investors at networking events. In addition, with bootstrapping, you won’t have the stress and risk of having an investor that wants to meet regularly and discuss how, operationally, you can optimize your business. As a founder who is trying to stay innovative this pressure might be a lot to handle, thus many startups in Europe are going the self-funded route. The funds will usually come from savings accounts, friends and family, or equity from other team members. However, at some point investment capital is usually required to scale the business so, it is more a question of timing.

Alternative business funding

In this varied capital lending market, there are also alternative funding options available? Take for instance microfinance lenders, who in simple terms, provide an alternative to conventional banks, for small business owners that need loans. It could be that a serial entrepreneur is currently financially overstretched or has a poor credit rating due to other businesses operations.

A non-bank financial company (NBFC) is a financial institution that does not have a full banking license or is not supervised by a national or international banking regulatory agency. It may be a good option as a capital bridge.

International investor Oleg Boyko believes in fintech’s potential to reach the 2.5 billion people globally that do not have access to banking services. Boyko intends to create next-generation financial intermediaries that works to serve the needs of individuals who aren’t well served by mainstream banks. Then there are combinators, like Paul Graham’s Y Combinator that offer seed funding for startups. Seed funding is the earliest stage of venture funding. It pays your expenses while you’re getting started. This could be a viable option for those who are simply not in a position, financially, to bootstrap, or perhaps they are ambitious for faster growth.


The premise behind crowdfunding is straightforward. You set up your pitch and ask people to support your business through small to medium sized donations. With sites like Kickstarter becoming increasingly popular, the potential to publicize a new business, and reach a wide audience of new backers is big. Of course, by contributing to your business, these small investors will get rewards in return, ranging from the first delivery of the product to unique merchandise and discounts. The success rate of the funding campaign relies heavily on the content, the incentives, and having a cool product promo video is essential. In many cases, businesses will employ a creative agency to put together a highly impactful campaign and then manage that on social media for the widest reach and engagement.

Peer-to-peer lending

Peer-to-peer lending is a relatively new method of debt financing that enables people to borrow and lend money without a financial institution. Using technology and big data, P2P platforms connect borrowers to investors faster and cheaper than any bank. As a small business, you can set up a campaign, set your interest rate, and give the details of your business. In most cases, the lenders’ cash will be locked up with interest rates ranging from 5% to as high as 15% depending on the risk profile of the borrowing business. Of course, as a lender, it could be deemed a risky investment given that startups have a high failure rate, but if the business has a good team, a decent plan, and an innovative idea, in some cases this form of lending makes sense, for both parties.

Government programs

Almost all governments support startups through incubators, accelerators, or by simply offering grants and funding. I’m in Europe now so I researched about the government programs they offer like their dozens of different funding agencies set up to serve EU citizens. They include EASME – Executive Agency for SMEs—which offers funding and support for innovative small and medium-sized enterprises, The European Investment Bank, The European Fund for Strategic Investments for SME, and EUREKA (Investment Across Borders) a leading facilitator of innovation, providing a proven platform for international R&D&I cooperation. Getting access to government funds is not as complicated as it seems. With a watertight business plan and a good idea, it’s possible to get significant cash to propel your business.

As a startup, having enough cash to scale is imperative. While many might bootstrap at the start, an essential next step is winning a low-cost source of capital. Depending on the entrepreneur and the type of business there are dozens of options, which will suit different risk profiles and needs. It’s important to perform extensive research and analyse what the market has to offer.