Top Sources For Business Funding (2017)

If funding is the hold on your big idea, you may want to look at this. The US Census Bureau’s April 2017 report on business funding sources is here, and the results are exactly what you need to see. Now, the report caught my eye because doing what I do links me with a lot of business owners and increasingly, would be founders. Individuals with more bills than brawn who more than anyone need to see the following.

Picture by Alvaro Martino

How do most people get the funding to start their business? According to the report, personal savings is still the number one source of initial capital. 60.3% of founders cited the piggy bank as all it took, representing over half of all businesses founded this year. What was shocking was the fact that among people who started through personal savings, women constituted 54.4% of the total. Male founded businesses on the other hand used personal savings 31.8% of the time, but use personal credit cards to start twice as much as women. The next most common funding source may need even more explanation.

The next more common source of funding was simply labeled ‘None Needed’. Business that by one cause or the other we able to being without any initial funding at all. This is the number I would like some of my would-be founder friends to focus on. The number of businesses started without funding is more than double the number started with loans, grants, and my favorite - ‘investors’ combine. Speaking of which, check this out.

While the majority of founders I speak to are gearing themselves for selection by venture capitalist, VC only represents 0.4% percent of all up-start funding nationwide. Another surprise for me was loans or grants from family and friends. This often cited advantage of the wealth-born founder over us po’ folk only accounts for 2.6% of funding sources. Next to nobody gets started this way, which brings me to my main point.

It seems that funding is a matter of will, not circumstance. At least this report says so. Personal savings and no funding at all representing roughly 80% percent of the pie. This says to me that funding hold backs may be more excuse than obstacle. It looks like most starters are people who have accepted the fact that their most reliable investor is themselves. I’m still left curious as to why women are more likely to start with personal savings than men, while men are twice as likely to start a business with a personal credit card than women. Check out the list below and tell me whether you see any other patterns.

Source of Funding