BizSugar.com › Strategy › Funding Your Small Business: Bootstrapping vs. Venture Capitalists

Business analysts and advisers often tell newly-minted entrepreneurs that when it comes time to find funding, focus on asking friends, family, and fools. The reasoning behind this wise counsel is that, if things go south with your new business, you won't be on the hook for a huge loan taken from an unfeeling, unremorseful bank. There are a few ways for a new company to avoid the bank and raise start-up capital without hassling friends and family for money. For companies built on novel, often high-tech, ideas, there is the venture capitalist - an investor willing to provide a business with the money they need on the assumption that, later on down the road, the business will do well enough to provide a substantial return on that investment. But is this the path that new businesses should follow? Or should they look within the business and keep it afloat without outside help?