Go Fund Yourself Don't waste time chasing investors. A myriad of options exist for ambitious entrepreneurs seeking to expand their startup and in need of financing.

By Sally Outlaw

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Today if someone has a viable business idea, many more funding options exist besides taking the route of seeking the backing of angel investors and venture capitalists.

A growing number of accelerators and incubators (virtual and otherwise) offer both financial and business-development support. Events such as Start Up Weekend provide a chance for founders to meet others and try to get their business ideas off the ground. And 3-D printing makes it possible to create a product prototype and then run a crowdfunding campaign. Numerous business competitions grant cash awards. Organizations such as The Awesome Foundation facilitate monthly, no-strings-attached micro grants to new projects.

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Need growth capital? Consider Lending Club (providing business loans for as much as $100,000). Or for a larger amount, try sites such as Funding Circle (offering loans of as much as $500,000) before giving away company equity to a venture capitalist. With Twitter testing its new "buy" button this week, companies can go directly to followers to increase revenue through product sales.

Consistently I see entrepreneurs paying fees to pitch at angel events or to just rub elbows with accredited investors. No reputable company should charge for this type of thing. I watch hardworking business owners give away large percentages of their ventures because they are raising capital too early when it is more difficult to assess the value of their companies. Some entrepreneurs have the mistaken impression that all it takes is a good idea and a venture capitalist will write them a check, with no groundwork having been laid. Their focus is merely this: "If only I could meet some investors, I could launch my company."

Related: When Angel Investors Reject Your Plan

If a company is more established and ready to exchange equity for capital there are additional funding avenues as well beyond venture capital firms. Before spending months and months chasing venture capitalists (who only fund less than 1 percent of U.S. companies), find out if the company's state of residence is one of the growing number that have approved intrastate crowdfunding. Or consider a Rule 506 of Regulation D private offering, a direct public offering or even a Regulation A funding path, depending on the company's stage of growth.

I'm not against venture capitalist funding. There is a time, stage and type of startup that's suitable for this approach. But for the majority of entrepreneurs, venture capital is not the best path to obtaining funds. Now is a unique time of financial innovation when customers can fund entrepreneurs' plans. There are low-interest lending platforms. And for the first time in decades, business owners can advertise that they are raising capital (thanks to Title II of the JOBS Act).

With technology advances, the social media explosion and the numerous crowdfunding solutions available, only a small amount of capital is needed to build a minimum viable product. Then the entrepreneur can get out there in the market to test ideas and grow a business. Finding funding is now a pursuit that's squarely in entrepreneurial hands.

Related: Everything You Need for a Winning Crowdfunding Campaign (Infographic)

Sally Outlaw

CEO and Co-Founder of Peerbackers and Worthy Financial

Sally Outlaw is the co-founder and CEO of peerbackers.com, a leading crowdfunding consulting and services provider. She's the author of Cash From the Crowd (Entrepreneur Press, 2013) and speaks nationally on the topic of crowdfinance and the JOBS Act.

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