5 Sources of Funding for New Businesses

Starting a business is exciting, but let’s face it, finding the money to make your idea a reality can feel like the hardest part.  With the right funding, you can take your business from concept to growth without losing control or momentum.      

In this guide, we’ll discuss five realistic and accessible funding options. From using your savings to pitching to angel investors or applying for a business incubator, you’ll gain practical insights on tapping into the right resources at the right time.     

Bootstrapping: using personal savings and family support 

One of the most common sources of funding for early-stage businesses is bootstrapping, which involves using personal savings or support from family and friends.     

The biggest advantage?   

You keep full control of your business. There’s no need to give away equity, and you can move quickly without waiting on loan approvals or grant decisions. It also shows commitment, which can help build credibility with future investors. However, bootstrapping comes with its risks. You're taking on the full financial risk, and borrowing from loved ones can strain personal relationships, especially if things don’t go as planned.      

To avoid issues when using personal or family funds:

• Always create written agreements 

• Clearly outline repayment terms (if any) 

• Be honest about the risks involved 

While bootstrapping won’t fund rapid growth, it’s often enough to test your idea, build a prototype, or launch your first product or service.    

Angel investors: finding your business champions 

Angel investors invest in early-stage businesses they believe have strong growth potential. They don’t just provide funding, they often share industry knowledge, offer mentorship, and open doors through their networks. For founders, this can be just as valuable as the capital itself.     

So, what do angel investors look for? 

• A strong founding team 

• A scalable business model 

• A clear plan for return on investment (ROI)  

• Early signs of traction, such as sales, users, or partnerships.  

One major advantage for UK-based startups is the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS), which offer attractive tax reliefs to investors. These schemes reduce their financial risk, making investment in your business more attractive.  

Securing advance assurance is crucial for proving your SEIS and EIS eligibility and building investor confidence.  Check out our ultimate guide to SEIS and EIS to learn more about how these schemes can benefit your business.   

Early-stage venture capital (VC) firms: funding for high-growth startups  

Early-stage venture capital (VC) firms are a valuable funding source for startups with high growth potential. These firms typically back businesses with strong founding teams, scalable models, and a clear market opportunity.  

Depending on the deal's stage and structure, funding is often provided through convertible notes or priced equity investments. If you're building something ambitious, VC firms like Fuel Ventures and Molten Ventures are known for investing in early-stage startups and helping them scale.  

Harnessing the power of crowdfunding platforms 

Crowdfunding is one of the most accessible sources of funding for startups. It involves raising small amounts of money from many people, usually through online platforms like Crowdcube, Republic, Fundable, or MicroVentures.   

There are several types of crowdfunding: 

• Rewards-based: Supporters receive a product, service, or perk in exchange for their backing, which is often used by startups launching something new.   

• Equity-based: Investors fund your business in return for shares, giving them a financial stake in your company.    

• Donation-based: Backers contribute money to support a cause or project. They may receive a small token of appreciation, but the primary motivation is often supporting a cause or project they believe in.          

Success on these platforms depends on a clear, convincing investor pitch deck and innovative marketing. If people are willing to back your idea before it exists, you're onto something. Even if you don’t raise millions, the visibility alone can attract future investors or partners.  

Business Accelerators and incubators: structured support and early funding  

Accelerators and incubators are potent sources of funding and support for early-stage businesses. 

Accelerators are ideal for startups with a business idea and ready to refine their model, scale up, or attract investment. Well-known UK and global programmes include Antler, Entrepreneur First, Founders Factory and Bethnal Green Ventures. Some accelerators offer direct funding, while others focus on preparing you to raise investment from external sources.  

Incubators, on the other hand, help turn early-stage ideas into viable businesses. They support you in building your MVP, validating your concept, and laying the foundations for future funding. 

Applying to an incubator usually involves submitting a detailed business plan and sometimes pitching to a panel. If accepted, you’ll join a structured programme to help your startup grow with expert guidance and resources.   

Choosing the right sources of funding for your business journey 

Securing funding is a key milestone for any founder, but no single path suits every business. The right funding source depends on your industry, business model, growth stage, and how much risk you’re willing to take on.    

Preparation is key to whichever path you take. Investors expect clear financials, well-thought-out forecasts, and a solid business plan. Without these, even the most promising idea can fall flat.      

At Jump Accounting, we help UK startups get investor-ready. Whether building reliable financials or ensuring you qualify for SEIS/EIS, we’re here to support your funding journey from the ground up.        

Need support to get started? Talk to one of our experts today.