How does an entrepreneur decide which type of funding is best?
The choice of funding depends on several factors including the stage of the business, the amount of capital required, and the entrepreneurâs willingness to relinquish equity. Early-stage startups might rely on bootstrapping, friends and family, or angel investors. As the business grows, it might attract venture capital or consider bank loans. Crowdfunding can be suitable at any stage but is particularly useful for product-based ventures seeking to validate market interest. Entrepreneurs should also consider the trade-offs, such as loss of control and equity dilution, when selecting their funding source.