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5 Funding Options You Didn’t Think Of

You may have heard of some of these options in the distant past, but we doubt they’re on the front of your mind when you think of ways to finance your venture.

5) Federal grants and loans. There are multiple federal agencies that have space allocated in their budget for financing the private sector. If you’re starting a venture in a rural area or an area deemed to be in need of redevelopment, you may qualify for loans from the Department of Agriculture, even if your venture has nothing to do with agriculture or livestock. The same is true for other federal agencies and executive branch departments.

4) Gender specific funding. There are non-profits that are willing to provide funding to a start-up based on the characteristics of its founders. These non-profits search for opportunities to fund female-led ventures. Other non-profits provide funding based on ethnicity and other federally protected classes. The federal government, through the Small Business Administration, also provides funding specifically for female-led companies.

3) The CIA. Yes, that’s right, the CIA will finance your start-up. In 1999 the CIA funded and launched a VC company originally named Peleus and now called In-Q-Tel. The fund’s purpose is to invest in technologies that can be used in the interest of national security and defense. The investments aren’t just limited to technologies for the CIA. Investments are also made that may benefit the NGA, the DIA, (presumably the NSA) and the rest of the national security alphabet soup. If you’re start-up is working on anything that could have a defense application, even if it’s not the primary purpose, and even if it’s not apparent to you how the product could have intelligence applications, In-Q-Tel may be interested in providing funding for you.

2) Large companies in the same industry. It seems crazy to consider sharing IP with other companies, especially dominant industry players , but large companies in high growth industries have increasingly become sources of capital for smaller companies in the same industry. Not all large companies are interested in this kind of investment. The ones that are might not fund start-ups in the very very early stages, but with shrinking pipelines start-up financing in general is growing in popularity as a way for mature companies to grow revenue and realize new applications of existing technologies.

1) State owned VC firms. Massachusetts and several other states have their own pools of money that act like VC firms. Some of these are purpose driven funds, like the Massachusetts Clean Energy Center (MassCEC) and some funds have a broader mission to fund any start-up located in their state’s boarders. Check with your state Treasurer’s office or your state Secretary of State’s office to see if your state has its own VC fund. In addition to MassCEC, Massachusetts also has a second fund called Massachusetts Technology Development Corp (MTDC)


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