By 2025, new small firms look to ways of getting money that are not the usual venture funds. Why? Because such funds come from just a few big places these days. And a lot of owners want to keep control and not share their firm. So, new ways that fit better with what the owner wants are now on the rise.
Key Ways to Get Money:
- Revenue-Based Financing (RBF): Gives money upfront that you pay back using a piece of your monthly money in. Works well for firms that get money all the time, like SaaS or online shops.
- Crowdfunding: Gets groups of people to give money via sites that offer prizes, shares, loans, or gifts. Good for testing the market and getting early buyers.
- Decentralized Finance (DeFi): Uses online ledgers for quick, world-wide money through new crypto deals and smart deals. But, it also brings rules and safety worries.
- Grants and Contests: Money that you don’t have to hand back or share your firm for. Comes from government, big companies, or big charity groups.
- Digital Lending Platforms: Peer-to-peer and fintech lending gives fast, easy loans with less fuss than banks.
Why This is Big:
With under 1% of new small firms getting usual venture money and 38% failing as they run out of money, these new options offer ways that are easy to get and change as needed. The best way to get money depends on where your firm is at, what field you are in, and how you plan to grow. Many small firms now mix many ways to get money to keep risks low and money in check.
Pro Tip: Keep checking on your money plan to keep up with trading shifts and big goals.
Three Alternative Ways to Fund Your Startup
Money Help by Share of Sales: Easy Funds for Rising Firms
Money help based on sales (RBF) gives startups money help without making them give a share of their firm. In this plan, firms get money early and pay it back by giving a cut of their monthly sales. This lets founders keep full control of their firms. This way of paying back shows a push toward money ways that change with how well a firm does in sales.
The RBF area has grown fast, jumping from $3.38 billion in 2023 to $5.78 billion in 2024 – a big jump in growth rate of 70.9%. Looking forward, the area might reach $41.81 billion by 2028, but still, a big 83% of firm owners don’t know about this way to get funds.
"Revenue-based financing is a flexible funding model where businesses repay capital as a percentage of their monthly revenue." – Capital Source Group, LLC
This cash plan works well for firms with steady, sure cash flow. Unlike normal loans with set payback times, RBF payments change with how much a company makes – more in high sales months and less in slow ones.
How Revenue-Based Financing Works
Here’s what happens: a cash giver offers money, and the startup pays a set part of its monthly cash flow until it hits a pre-set pay cap – usually 1.2 to 1.5 times the amount taken. For example, if a firm takes $100,000 and agrees to pay back 5% of monthly cash flow, it would pay $2,500 on $50,000 in sales one month and $4,000 on $80,000 the next. This setup gives flexibility, easing cash strain when cash flow is low.
RBF fits well for firms with even cash flow. SaaS groups, e-commerce sites, and service firms with repeat customers often use this model since pay backs match their cash flow.
Capital Source info shows more use of RBF. In April 2025 alone, they gave out $2.9 million across 16 fields, making their total cash given over $360 million. Another upside is speed – RBF deals often close in days or weeks, much faster than the long months typical of venture cash deals.
One big win story is Wing, a virtual helper site. The firm got $500,000 in RBF from Efficient Capital Labs and then another $900,000, making a 210% yearly growth rate. The cash let Wing push its marketing, enter new markets, and pull in more customers.
Pros and Cons of Revenue-Based Financing
RBF has several good points. Founders keep full control of their firms without needing board seats or investor checks. Also, as paybacks rise with cash flow, businesses face less money tightness in slow times – a big plus for firms with peak sales times.
Yet, there are downsides. RBF can cost more than normal loans if a company’s cash flow jumps up, as the total payback sum goes up. It also needs an even flow of cash, making it less fit for new startups that haven’t yet shown their business plans work.
| Thing | Money-From-Earnings | Money-From-Others |
|---|---|---|
| Owning Part | Keeps full control | Gives up some |
| Pay Back | Cut from sales | No pay back; money comes back when leaving |
| Danger | Risk moves with sales | Big risk for money givers |
| Power | You keep in charge | Money givers may get say |
| Price | May cost more in end | Owning part drops for cash |
Choosing RBF or venture capital rests on what a startup wants and aims for. For firms with steady cash flow who want to keep total control, RBF gives quick, easy money. But, startups aiming for quick big growth and okay with giving up some ownership for funds might see venture capital as a better choice.
Crowdfunding: Making Use of Group Power
More and more, new firms are using crowdfunding to pool money together with the help of the community. This method gathers small bits of money from many people, adding up to a big sum. In fact, the world crowdfunding market hit more than $1.4 billion in 2023 and might reach double that by 2030. But crowdfunding does more than just raise cash – it helps test if there is an interest in the market, build a group of early supporters, and even pull in buyers before the start.
The data is strong. In 2024, equity crowdfunding alone pulled in over $558 million. From May 16, 2016, to December 31, 2024, about 8,500 campaigns started, all looking for funding between $560 million to $8.4 billion. These numbers prove crowdfunding is a good pick for startups that need to find money.
Main Kinds of Crowdfunding for Startups
Startups can pick from four main types of crowdfunding, each with its own setup and aim:
- Reward-based crowdfunding: This type is quite liked. People give money and get a product or service in return. This lets startups sell their stuff early while they gather the funds they need.
- Equity-based crowdfunding: Here, people get shares in the firm. This way is often used by firms that expect to grow a lot. In 2024, this type alone made over $558 million, with the SEC setting a max raise of $5 million for these drives.
- Debt-based crowdfunding: This works like a loan. Startups get money from backers, then pay it back with some extra. It lets them get funds without losing any control.
- Donation-based crowdfunding: This type depends on money from people who back a cause. It fits well for non-profits, social plans, or community projects.
| Sort of Crowdfunding | How It’s Funded | What Investors Want | Rules Toughness | Best for |
|---|---|---|---|---|
| Reward-Based | Backers get a product or service | Early use, cuts on cost, special gifts | Not tough | Putting out new goods or creative plans |
| Equity-Based | Backers get part of the firm | Money gains | Very tough | Fast-growing new firms that need more money |
| Debt-Based | Backers lend cash to be paid back with more | Money back plus more | A bit tough | New firms that need money but don’t want to lose control |
| Donation-Based | Backers give money to help | Help the world | Not tough | Groups that help people or local plans |
Rules and Steps in the U.S.
In the U.S., crowdfunding follows strict rules, mainly for those sharing parts of their company. The Regulation Crowdfunding (Reg CF) shows how firms can sell these parts online through SEC-okayed go-betweens like brokers or funding spots. By these laws, firms can get up to $5 million each year, and each small investor has a cap on what they can give yearly.
By the end of 2024, there were 83 funding spots ok by the SEC and FINRA, with the top five handling about 70% of what was offered. Firms must tell the SEC, investors, and go-betweens all the key info. Stocks bought this way can’t be sold again for a year, and a "bad actor" rule stops plans if the firm’s top folks have past issues with stock fraud or legal problems.
In all, firms told of $1.3 billion from about 4,000 drives, with the average win at about $346,000. Even though it takes much work and rule-following, the possible gains can be huge for new firms.
The Good and Hard of Crowdfunding
Crowdfunding does more than give money. It helps new firms check if there is want for what they sell and grows a group of early fans who often turn into the first buyers and supporters. For firms that sell items, selling early can help cash flow and lower the chance of a product flop.
Yet, winning plans take lots of time and hard work. Startups must make fun content, talk a lot with backers, and handle tasks after the campaign like getting the product out. Many plans don’t hit their money goals, and even the winning ones come with must-do’s like keeping promises or meeting what investors expect. Sharing parts of the firm for money, in special, comes with tight rules, like SEC reports and a one-year ban on selling parts again.
Despite these tough parts, for new firms ready to work hard, crowdfunding can be a strong way to get funds and grow a faithful group. This mix of money help and market checks makes it a good pick in a new firm’s range of funding tools.
New Money Ways in DeFi: How It Shapes Making Money
DeFi is changing how new firms get money by moving past old key players like banks and money investors. It uses blockchain and smart contracts to make deals by itself, giving new chances to business minds all over the world. This change helps bring up new money-making ways worth a look.
In the first three months of 2025, DeFi plans got $763 million, adding to the $4.8 billion full fund for blockchain new firms. Now, DeFi money-making ways make up over 40% of new blockchain plans, up from just 15% in 2022. The market itself is expected to grow big, from $32.36 billion in 2025 to about $1.56 trillion by 2034, growing at 53.8% each year.
How DeFi Helps Startups
DeFi has opened up money ways not possible before. New firms can now get money through ways like Initial DEX Offerings (IDOs), where coins start right on decentralized swaps, giving quick trade and cash flow. Decentralized crowd money sites cut out place limits, let people from all over give money. Also, cash mining programs give early fans coins, making their goals line up with the new firms.
Take Uniswap, for one. It first got money from firms like Paradigm and USV in 2019, but got big by starting the UNI rule coin in 2020. Early users and cash providers got coins, and now, the Uniswap DAO looks after over $2 billion in items. In the same way, Aave, first known as ETHLend, got money through a Coin Start in 2017 and later got more cash through cash mining, giving AAVE coins to users who gave or took items.
Smart contracts are key here, doing things like giving out coins and voting by rule. This cuts costs and makes sure things are clear. For new firms, this means fast money access and a way to set money terms that fit their growth aims.
Good and Bad Sides of DeFi for U.S. Startups
DeFi money has many good sides. Startups get to reach money from all over the world without the slow parts of old banks. Set terms by program let for smart money builds, like sharing gains with coins or money tied to goals. Blockchain clearness builds trust by checking deals and coin shares in real-time.
In how it works, DeFi is smooth. Deals are faster and save more money than old ones, giving things like loans, credit, and money swaps with secret and clear terms.
Yet, DeFi has big risks. Rules not yet set in the U.S. keep changing. Market ups and downs can shake up coin worth, and weak spots in safety are a big worry. In 2024 alone, the crypto space saw $1.5 billion lost to tricks and wrongs, showing the clear risks in smart contract setups.
One clear case is the TinyMan mess. In January 2022, a bad code in a deal tool on the Algorand trade let a bad guy mess up the goBTC/ALGO pool, which led to a $3 million loss. Such events show how much we need good security checks and tests before we start DeFi cash plans.
Facing U.S. Rules in DeFi
U.S. rules for DeFi are tough and keep changing fast. Different groups look after parts of this area: the SEC handles stocks, the CFTC deals with bets, FinCEN takes care of money keeping laws, and the IRS takes care of tax rules.
New rules have made things hard. For example, the IRS makes brokers and some DeFi spots tell on crypto sales over $600 with Form 1099-DA. The new GENIUS Act wants to make stablecoin makers get a federal nod, with costs of $2–$5 million each year for mid-sized ones. These steps try to keep new ideas safe for users.
| GENIUS Act Part | What it means |
|---|---|
| 1:1 Money Back Rule | Each stablecoin needs to be supported by strong, easy-to-sell assets, checked every month. |
| Need for Official Permission | Those who make them must get a permit from the Treasury Department. |
| Stop on Tech-Based Stablecoins | Bars any stablecoins not backed by real money. |
| Promise of Cash Swap | People can trade their stablecoins for U.S. dollars whenever they want. |
For new companies, adding rules and checks is key. Early law checks can spot risks and keep you right with area laws. Using know your customer (KYC)/anti-money laundering (AML) rules, even for spread out systems, with open rule-setting and owning up to acts, helps cut down risks. Having a wise law helper and keeping full lists of money raising acts and token shares are key too.
Putting rules into your plan from the start is a must. This means putting safety first with strong tech for saving keys, regular checks of your smart contracts, and reward plans for finding flaws. Knowing new rule changes and changing how you raise money can help new companies reach world money while keeping on the right side of the law.
Money Help and Contests: Ways to Get Funds without Giving Up Power
Money that doesn’t ask you to give up part of your business lets owners keep full control. Here’s a look at different grants and contests that can fit your business’s growth and needs.
Types of Grants and Contests
Government Money
U.S. government support is a big way to get money without losing business share. Programs like SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) give out money that ranges from $50,000 to $1.5 million. Also, some plans set aside money just for small businesses owned by veterans or women.
Corporate Money
Corporate grants help fast. For instance, the Allstate Main Street Grants Program gave $20,000 to 63 small businesses, asking them to make at least $25,000 in 2024 and take part in online coaching. Also, Verizon’s Small Business Digital Ready Grant handed out $10,000 to 50 businesses for their digital needs.
Startup Contests
Contests give more than money; they offer media spots, advice, and chances to meet others. Example: the CO – 100 2025 program picked 100 small and mid-sized U.S. businesses, giving $2,000 to ten winners, with the top winner getting $25,000.
Foundation and Charity Money
Grants from foundations and charities focus on specific groups or causes. Like, the Skip Growth Grant gave $5,000 to U.S. business starters who sent in a plan by July 18, 2025. Many are for women, minorities, veterans, or businesses in certain fields or places.
Disaster and Community Growth Money
As disasters happen more, funds for recovery and local growth are more common. They aim to help businesses rebuild after events like storms or fires and to help local economies grow.
Tips for U.S. Startups Applying for Grants
A good grant ask starts with knowing what the funder cares about and the projects they back. Start early to make a clear and strong proposal.
Watch the rules closely – like where you must be and what the funder wants – to keep from being cut. Write simply and clearly – avoid hard words – so people from all areas can get what your project does and why it helps.
Your proposal must answer big questions: What issue does your business handle? Who buys from you? How is the issue handled now? Show clearly how your idea helps people and what bigger good it does. Show your steps toward selling with stuff like user tests, teaming up, or sales you’ve made.
"Investigate the funder’s previous grantees, values, and mission statement. Understand their objectives, target audience, and the types of projects they typically support. This information will help you align your proposal with their goals. Be sure to customize your proposal to address the specific values highlighted by the funder."
– Jacob B. Chase, CEO, Chase Consulting Solutions
Send in your form one day early to stay clear of tech issues at the end. Pull together key papers like the Articles of Incorporation, money reports, and board info ahead of time. Also, let someone check your form to make sure it’s easy to get.
"Length matters, and short and snappy is more effective than long and thorough. There is a human on the other end of your grant application, and you should be thinking about how humans take in information quickly and easily."
– Loree Lipstein, Founder and CEO, Thread Strategies
Looking at Money Help That Doesn’t Take Your Share
Every money source has its own good points. Government gifts like SBIR/STTR give out money from $50,000 to $1.5 million, while company gifts are often from $10,000 to $20,000. Startup contests, like CO – 100 2025, hand out awards from $2,000 to $25,000, and grants from groups, like the Skip Growth Grant, are usually about $5,000. Picking the right one depends on how new your business is, what field it is in, and what money needs you have.
Getting to know the people with the money can really help your chances of getting it. Go to their events, keep up with their news, and ask smart questions. By using this type of money help in your money plan, you can get more resources without losing any part of your business, making a well-rounded money plan for 2025.
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New Ways to Get Cash: Digital Bids Over Bank Loans
When we think about how to gather money in 2025, digital lending spots are now a big help. They join the group of old and safe money paths. These spots get start-ups cash quick and with fewer rules by linking money askers right with money givers or by making the loan process easy. It cuts down on the usual slow steps.
How Sharing Cash and Tech Money Lending Work
Sharing Cash (P2P) Lending lets money askers and givers meet on the web, with no need for banks. You put in a request, and the site checks how likely you are to pay back. It shows your need for cash to possible investors. Many can give a bit to fill your need. This way, risk is shared.
Tech Money Lending, on the other hand, uses smart tech like code patterns and smart robots to make loan choices faster as direct lenders. These lenders look at other info – like house rent records, light and water bills, and even your social web life – to guess how risky you are as a borrower. Danielle Antosz, a Tech Money Writer at Plaid, puts it clear:
"Fintech lending empowers traditionally underserved P2P and business borrowers by providing an alternative means of funding and helps improve financial health and freedom. Lenders gain access to more data, allowing them to securely provide capital to a wider range of borrowers."
Look at Prosper Marketplace. It was the first P2P lending site in the U.S., and it has given out more than $28 billion to 2 million people who needed money. On average, the people who put their money there made back 5.3%. Around the world, P2P lending made $153 billion in 2022 and may reach $1.7 trillion by 2032, growing by 27.5% each year from 2023 to 2032.
Now, startups can see if these ways of getting money are right for them.
What to Think About and If It’s Right
Interest Rates and Costs change a lot based on the site and the risk of the person asking for money. P2P lending often has lower rates for these people but still gets good money back for the people lending, more than regular saving does. But, the sites usually ask for fees from 1% to 6%. Money for personal use often ranges from $500 to $35,000, while smaller and medium firms might get from $25,000 to $75,000 or even more. The process is fast – often done in 1–2 weeks – making it great for startups that need money quickly.
Risk Factors are key too. Digital lending can have more people not paying back, sometimes over 10%, which is more than regular banks. For example, the Federal Reserve said that only 1.44% of bank loans had issues as of Q2 2024. P2P sites usually see loan losses of 2–3% for all types of loans. Also, P2P loans are not protected by FDIC, meaning both sides risk losing if the site goes down.
Best Fit Scenarios include startups that need money fast, those turned away by normal banks, or those who don’t want long application times. These platforms help firms with good money basics but little credit history. Digital lending works well for small and medium firms, freelancers, and people who want an easy way to borrow.
How Startups Decide Between Lending Types
Here’s how P2P lending, fintech lending, and regular bank loans are different:
| Feature | P2P Lending | Fintech Lending | Old Bank Loans |
|---|---|---|---|
| How to Apply | Web places join folks who want money with those who give money | Smart web setups make it easy | You must fill forms and go to a bank |
| How Fast to Get OK | Most times 1–2 weeks | From minutes to hours | Can take weeks or months |
| Cost to Borrow | Often less, changes with how much folks want to invest | Depends on risk and platform | Usually more but stays the same |
| How Much Can Get | From $500 to $35,000 for self; $25,000 to over $75,000 for work | Different for each platform | You can often get more money |
| What You Need to Show | Not so hard, looks at more than just your score | Sees lots of info, not just score | Very hard rules on score and money in |
| Extra Costs | Fees of 1–6% when you start | Fees change by platform | Smaller fees but higher costs to borrow |
| Bank Safety | Not safe by FDIC | Safe if the platform is okay | Safe by FDIC up to $250,000 |
| Papers Needed | Easy web steps | No papers needed | Must give in papers by hand |
The best pick changes with what your new business needs. Needing big, long-term money and able to hit tough loan rules? Old-school bank loans may be right for you. But, for fast, short money, hard to top online loan sites. With 84% of folks having used P2P money sharing and 44% using it each week, these sites are now a big piece of today’s money world. Adding online borrowing to your money plan can keep your startup quick in a swift-shifting market.
Mixing Different Money Plans with Doing Business
Smart new businesses don’t just run after money – they fit their money plans with their main aims. Whether it’s starting a new item, moving into new areas, or making their work bigger, money choices should be part of the whole company plan. With ways like money-back funding, crowd pool, and DeFi, new companies need a way that’s as mixed as the money sources themselves.
Making a Mixed Money Plan
Just sticking to one money source can be a gamble. By mixing it up, companies can make a more steady growth path. The key is to fit the type of money to your needs and time line. For instance, set your money choices with your cash flow times and key steps to make sure you have the money when you need it most. This way cuts money risk and makes sure you’re ready to grab new chances as they come.
Fitting Money with Business Aims
Not all money is the same. If you focus on making a new product, you might pick slow money that gives you space for new ideas without the rush to pay back soon. On the flip side, making things big or pushing into new areas could need money that grows with needs. By fitting money with aims like selling, getting new users, or doing things at a bigger scale, you can make sure each buck backs your bigger plan.
Using M Accelerator’s Full Plan
Here’s where a full plan comes into play. M Accelerator offers a set-up that easily fits your money plan with doing things. By bringing together plan, operations, and talking, their way backs everything from plans to go to market, to making products and making things big.
Their set-up doesn’t just make things run smooth inside – it also makes it easy to talk with investors, grant groups, or crowd pool givers. With a net of over 25,000 investors and a group of more than 500 founders, M Accelerator has helped new companies get over $50 million in money. Plus, their GTM Engineering team can set up tech systems in just 1-2 weeks, making sure your work stays in line with new money chances.
Making a money plan that really backs your business isn’t just about getting money. It’s about making a system that ties money choices right to your daily work and long aims. This link turns money into a tool for doing well at work.
Conclusion: Picking the Best Money Path for Your Startup
When you pick how to fund your startup, it’s key to know what your business needs.
The way to find funding has changed a lot. Think about this: less than 1% of startups get cash from big VC funds, and 38% of startups fail because they run out of money. These facts show that choosing the right money plan is vital not just for growth, but to keep your business alive.
The top funding choice depends on things like what stage your startup is at, what area you work in, and what you are aiming for. A tech startup making a consumer app might do well with equity crowdfunding, which also helps in making a strong early user base. But, a firm making things might like revenue-based financing better, as it lets them pay back based on what they earn. The key is to know the give and takes of each type of funding.
"The right funding approach depends on your business’s stage, financial health, and growth plans. A well-chosen strategy supports your immediate needs while positioning your startup for future success."
Time is key. You need to set a good mix of now and later needs, how fast you want to grow, and how much power you want to keep. For example, bootstrapping keeps full ownership, while going for VC money often means giving up some shares. And ways like money-based finance or DeFi are paths that fall in between.
Many winning startups use a mix of ways to get money to cut risk and keep money safety. For example, they may use grants at the start, crowdfund to check their market, and use money-based finance to grow big. This mixed way cuts the tie to just one way to get money.
As Jeffery Bussgang from Harvard Business School says:
"Raising startup capital is more of a science than an art. There’s a well-defined checklist that investors are looking for – and that founders need to be aware of – to achieve more predictable outcomes during the fundraising process."
Your money plan should grow with your work. What helps in the early days may not work when you need to grow big. Check your money plan every six to twelve months to match with new market needs and to grab new chances.
Getting funds means more than just having cash – it’s about making ties and laying the ground for a long road ahead. You can go for usual ways to get money or try new ones, the best plan fits your aim, helps you grow, and builds a strong base for what’s next.
With lots of ways to get money today, you hold the power. Spend time to figure out which ways fit your aims. Make smart choices that move your startup towards winning.
FAQs
The good and bad sides of using Decentralized Finance (DeFi) for startup cash?
Decentralized Finance (DeFi) and Startup Cash
Decentralized Finance (DeFi) offers a lot of good things for startups wanting money. First off, it removes space limits, letting startups reach money people from every part of the world. It also cuts cost for deals and makes processes faster, making it a good plan for startups that need cash quick and with little extra cost.
But, DeFi has its tough parts too. Smart deals, a key part of DeFi setups, can have mistakes that may make them weak to bad uses. There’s also the fear of hacks and the always shifting market conditions, which could put money in danger. Not having a central power adds more issues, making it hard to fix fights or deal with safety breaks. While some setups talk up their tight code work to keep things safe, startups need to check these talks well before using their cash.
What is Revenue-Based Financing (RBF), and how does it stand out from usual business loans? What kind of businesses gain the most from RBF?
Revenue-Based Financing (RBF)
Revenue-Based Financing (RBF) is a way to fund where businesses pay back a fixed part of their monthly income. This means how much they pay each month can go up or down with their earnings. Unlike the usual loans, which need the same pay each month no matter how well the business does, RBF changes with how much money the company makes.
This method fits well for companies with steady and sure money coming in, like SaaS firms, e-commerce groups, or new companies that don’t have big assets for security. It’s a good pick for companies that need money fast and can’t stick to the tough payback rules of regular loans.
