By Emily Greene
The journey of entrepreneurship often begins with a great idea and a burning passion. But what sustains and propels these startups and small businesses forward? It’s the innovative and varied landscape of funding mechanisms available to entrepreneurs. We snagged some time with rural founders in our network to explore how they pursued capital, in all its forms.
Revenue
For founders who value full control of their business, bootstrapping offers a self-reliant funding approach. This method involves using internal profits to fund operations and growth, rather than seeking outside investment or loans.
While bootstrapping doesn’t provide the immediate influx of capital that comes with other funding mechanisms, it allows founders to maintain independence and avoid debt or equity dilution. The trade off is that bootstrapping doesn’t always allow for rapid scaling.
It’s a funding method that relies on a business having a positive cash flow, which can be difficult to maintain when a startup is getting off the ground. When done well, it can support sustainable growth and long-term success without the distraction of courting outside investments.
The former owner of Thrive Yoga (and Startup Colorado Executive Director), Brittany Romano, didn’t have the option to seek outside funding when she first purchased her business. She relied on revenue alone to grow her yoga studio.
She said, “It helped me learn to maximize every dollar that came into the business. Early on, I didn’t have a lump sum of money in the bank, so I couldn’t make large investments or dramatic changes. I learned that money buys you time, but fortunately I was young and I had time on my side.”
Though bootstrapping can teach a founder valuable skills, it’s not for the faint of heart.
“My advice might sound a little hypocritical because I don’t recommend bootstrapping a business unless you are mentally resilient and physically prepared to endure those early, slightly impoverished days.”
Grants
Grants are often designed to support specific initiatives or advance particular causes. While commonly associated with nonprofits, grants can also offer startups or small businesses a valuable source of capital. For founders, the primary appeal lies in the fact that grants don’t require repayment, making them a risk-free way to secure funding.
However, grants come with strings attached. Applicants must meet detailed eligibility criteria, often tied to the grantor’s mission or goals. Once awarded, businesses may need to adhere to strict reporting requirements, deliverables, and deadlines to ensure accountability. This means grants aren’t simply “free money”; they require careful planning and diligent follow-through.
For businesses with missions that align closely with a grant’s focus, this funding can be a powerful tool to advance their goals.
At first, Dani spent hours pursuing funding on a per-project basis—primarily in the form of sponsorships from outdoor industry companies. Then, in early 2024, she received a grant from the National Association of Latino Arts & Culture. It enabled her to diversify her funding portfolio to include grants, direct sponsorships, crowdfunding, and impact partnerships.
“I pursued this grant because I had higher confidence that the funding organization would see value in the story itself. There’s an important lesson here for other creatives, whether they’re freelancers, solopreneurs, or even content creators. Know what your story is about, who can get behind it, and what’s in it for them.”
Dani Reyes-Acosta is a Mestiza and Filipina filmmaker who launched Afuera Productions—a documentary and branded storytelling production company—in 2022. She said that the business evolved rapidly and her search for funding explored a variety of mechanisms.
“I knew that raising funds through the traditional route of corporate sponsorships and brand partnerships alone wouldn’t be sustainable—not for me or for any team members I’d bring on board.”
Her goal was to find a funding mechanism that would ensure fair compensation and reciprocal impact to all stakeholders, from film participants to crew members to even the local communities who hosted them.
Traditional Loans & Micro-loans
Traditional loans and microloans are two common funding options that provide entrepreneurs with access to capital without giving up ownership of their business. These loans, structured similarly to a mortgage or car payment, are provided by banks or large financial institutions. Founders receive a lump sum of capital and repay it over time with interest.
The key advantage? Traditional loans don’t require founders to take on risk at their own expense and can avoid assuming personal debt. However, eligibility requirements like credit score minimums or collateral obligations can be a barrier. On the upside, traditional loans often offer a flexible line of credit that can be used for anything from product development to operational costs.
Microloans cater to founders needing smaller amounts of capital, particularly those in underserved communities. These are often significantly smaller than a traditional loan—in fact, the first micro-loan was $27!
Platforms like Kiva or DreamSpring connect entrepreneurs with global supporters, offering loans as small as $5.00 without requiring collateral or extensive credit history. Many microloans, capped at $15,000, are interest-free—a significant benefit for small business owners starting out.