How to finance your startup

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You have a brilliant idea – a solution to a real problem – and all the passion in the world to move things forward. It is the engine that will propel your startup to success.

The bitter truth, however, is that a startup cannot survive on passion alone.  Much like how a car’s engine needs fuel to work, your startup needs money. Acquiring capital is the first essential step to starting your dream venture.

With that said, let’s explore the different ways to fund your venture.

1. Bootstrapping (self-funding)

Don’t expect anyone to fund your project if you don’t have any skin in the game. As a manager/owner, there’s an unspoken expectation for you to kick-off your project with your own savings.

Yes, of course there are risks involved. Despite this, I’m a strong believer in investing your own money into your startup. It makes you commit to your idea, and put your best foot forward. For me personally, the thought of losing money was a great motivator which kept me focused and made me work very hard to get to the next level. I also preferred being my own investor so that I could enjoy full ownership and would not be obligated to answer to anyone.


  • Investing your own money sends the signal that you’re serious and committed to the project.
  • Having majority ownership allows you to have control over the strategic direction of the business.


  • Investing your own money means you are entitled to the risk of losing it all.
  • You do not get any third party introductions and have to make your own lasting connections.
  • You have to plan well so that you can cover your cost of living.

When we first started TTT Studios, everything was self-financed. We were lucky to have loved ones who supported and believed in us, and it made us hustle harder so we don’t let them down. We could not afford luxuries like having an office space. Meetings with potential clients happened in coffee shops and we worked very hard to basically just break even. I’d be lying if I said it wasn’t a struggle, but it allowed us to start building a reputation and a foundation from which we could grow.

2. Friends and family

For the majority of entrepreneurs, the friends-and-family round of financing is critically important. This is the group of people who will likely believe in you without having to understand your business plan. Maybe they’re looking to score big by being part of the early stages of your venture or maybe they’re just really supportive of you. Either way, this is good money to take especially at an early stage. However, there is no such thing as a free lunch. If things go south, these people will most likely be in your life longgggg after the undertaking. It’s not just the money you stand to lose, it’s something far more valuable: relationships. Before you take any money, be honest and realistic with them and with yourself about the likely outcome of the investment. No matter how passionate you are, the reality is, the odds are not in your favour. It’s highly unlikely your venture will be the next big success.


  • Less convincing is required to get funding from friends and family.
  • Often takes the least amount of time to raise funds
  • Working on your pitch for friends and family is great practice for pitching to other investors


  • In case the venture fails, there is a possibility that your relationships will become strained if expectations were not properly managed.

Although TTT would not have been the company it is today without friends and family, this wasn’t one of sources we turned to for funding. However I have taken money twice from friends and family in the past for other unproductive projects, and the series of ups and downs ultimately helped build the foundation for what TTT is today. Just after university, before the .com burst, my brother and I had an idea that we really believed in. The details for this business are not important as the idea didn’t live up to the expectation. Despite our inexperience at the time, my parents believed in the idea enough that they signed a check without asking too many questions. To this day I look back at this investment as not an investment in our idea but an investment in us. As I stated, we were unsuccessful, but that investment taught me so much; most important of all to trust in family. That is why, when we started TTT, we made sure to have the culture of family as the foundation.

The second time we took money from friends and family, we did it as a loan. This loan went towards building a product that was technically impressive but sadly we were unable to commercialize our creation. On the bright side, we received so much credibility from building our prototype that a lot of projects of high complexity were thrown our way with confidence. Because of this, we were able to repay the loan within a year.

3. Angel investors

Angel investors are often well-off professionals or successful business owners who are keen to invest in companies to either be a helping hand or earn some equity by guiding the next generation of business visionaries. The TV show ‘Shark Tank’ is a good example of a group of angel investors being pitched business ideas from entrepreneurs looking for funding. Though slightly overblown for the sake of television, they bring up some good points, and ask some questions that, as the owner of a startup, you should be able to answer. To meet the right angel investor, you could try looking up online platforms such as and attend industry events. often has local events for linking angel investors with entrepreneurs.


  • The angel investor usually has a lot of experience and expertise
  • The money from you get from an angel investor is an investment and not a loan
  • The angel investor can provide you with connections and introductions
  • You have convinced another person that your venture has merit which is good
  • The relationship is not necessarily as formal as a partnership with a venture capitalist


  • There will be various obligations that you will have to adhere to
  • The investor now has a say in the business and you no longer have full control
  • Angel investors often have other obligations and it is still up to you to carry the venture forward

Personally speaking, I’ve had mixed experiences with the angels I’ve encountered in the past. I met two angel investors who were very interested in a product I built. They talked a very big game and sold themselves very well. I was excited and brought them onboard, giving away far too much equity. As soon as we were bonded and ready to go, they more or less disappeared. I acknowledge that it was my fault as I had offered equity without any set expectations. They received their equity upon signing without having to earn anything. At that point, I was stuck with a bad deal, no support and dead equity in a venture that really needed help. When working with Angel investors, I highly advise to not get too excited and overextend yourself. It’s best to set realistic goals and make sure you hold everyone accountable.

4. Venture capital

Venture Capital is basically a pool of funds gathered from a group of investors from various sources to finance startups with a high potential for growth. It isn’t easy to secure as you have to fit all of the criteria and prove the long term potential of your business. However, it has multiple added benefits in the form of management support and resources.


  • Similar to an angel investor, VCs provide capital which is not usually a loan
  • The VC has a vested interest to help you grow quickly
  • VC can potentially provide quality introductions and impressive connections


  • They secure a stake in the company where they often have a big say
  • Your vision for the company may not match with what the investor has in mind.
  • It can be very time-consuming to find a venture capital investor

My experience with Venture Capital has not been positive. There are a number of amazing VC firms set up to help you succeed, but what a lot of entrepreneurs do not realize is that your venture must fit into their criteria. Most venture funds have very specific goals and you need to tick all the boxes in order to be heard. If you think that you will walk into a venture capital office and walk out with a giant cheque, you might as well buy a lottery ticket. Most venture capitalists I met with gave me the impression that they were only interested in providing money to scale my venture without taking on virtually any risk. Expect the process of working with a venture capitalist to take some time.

5. Incubators/accelerators

Incubators and accelerators are organizations that can help you speed up your business plan. Typically located in major cities and hubs for innovation, they provide startups with a co-working space, and support in the form of networking and mentorship. The difference between incubators and accelerators lies in the stage of startups they accept. Where incubators provide tools for startups of an early stage, accelerators typically work with more developed startups in the phase of growth. The contacts and networks of both can help get you teamed up with a great investor. Going to local industry events like Vancouver Startup Week is also a great way to meet people.


  • Incubators support and train you to acquire more funds
  • They can help your startup grow quickly
  • They provide great connections
  • They provide a workspace that is usually shared by many like-minded entrepreneurs


  • Incubators and accelerators are not located in every city and you may need to relocate
  • They are set up to be a cookie cutter service that might not fit with your venture

At TTT, we have helped a number of great companies that were a part of an incubator.  For anyone looking to do their first venture, an incubator is a great place to learn and thrive in an environment with like-minded entrepreneurs. It’s definitely a huge advantage to have an accelerator fund your idea, provide you with office space and legal assistance. Anyone I’ve met who has been through the process spoke very highly about the knowledge they gained and how much they enjoyed the working environment.

6. Bank loans

The conventional way to fund your startup is by acquiring a good old fashioned bank loan. By presenting the necessary documents, any business can be approved, but there are definitely a lot more risks involved.


  • There is no dilution of your company’s equity
  • You have an extensive choice of banks available to borrow from.


  • You have to pay the money back with interest
  • You need to have a strong financial history
  • Aside from cash, banks provide almost zero assistance to startup entrepreneurs

Most people do not enjoy the idea of going to a bank for a traditional loan. Getting an investment that does not need to be paid back seems to be more favored, and in most cases, it is best NOT to go to a traditional lender. However, there are situations where taking out a bank loan may be more suitable. If you already have guaranteed sales and you just need some quick cash to make ends meet in the short-term, then a bank loan may be the way to go. Yes, they do require you to pay back the money but you do not lose any more ownership of your venture.  In the past, we’ve had good experiences with the Business Bank of Canada and TD Canada Trust.

7. Get a paying client or customer

If you build a product, you must know the audience it is designed for.  By getting a sale before completing your product, the client may be able to pay for most of the development before receiving the service. This is pretty much how most kickstarter campaigns work. Although great in theory, this option isn’t as simple as it sounds. If you get too many pre-orders before the product is complete, you might struggle to deliver. It’s not necessarily a bad problem to have, but failing to process an order, or taking too long to deliver a product or service will hurt your reputation.


  • You have a paying client!!!!
  • You’re able to test the product with the client and make changes based on their feedback


  • It might be hard to get a client before the product is complete
  • Failing to deliver a product will hurt the reputation of the business, and the credibility of the entrepreneur.

TTT Studios is a service company.  We used the “Get a Paying Client” model to grow in our early days. Although we started small, we always delivered quality work and managed to grow from word of mouth.  We avoided taking huge risks and made sure we had enough money set aside before we committed to getting an office space or buying any equipment. We scrimped and did everything slowly with patience and hard work. Having paying clients early on is how we were able to stay 100% privately owned. We’re now able to move in any direction we want, without having to justify our decisions to anyone other than ourselves. We have had a number of opportunities to take on investors and/or partners, but we have always decided against it. Our desire to maintain our company culture was more important to us than taking the money.

8. Grants and subsidies

Grants and Subsidies are programs that are provided by the government to help springboard your company. There are many different types of grants available to help with different areas of your business. You may already qualify for a grant simply by hiring from a certain category of employees, or doing business with firms from a certain category.


  • There are many many many grants out there
  • This is money, that in most cases, does NOT have to be paid back
  • It allows you to grow your business without giving up equity


  • Takes time to find the grants that you qualify for
  • Just because you apply does not mean you will be awarded the grant
  • Some grants are only available on certain calendar dates

I cannot overemphasize the importance of grants. If you are in charge of running a company, I highly urge you to take advantage of this.  We were able to grow TTT because of the available grants. I speak to many people south of the border and am constantly being reminded that we are very fortunate to live in Canada where we are able to apply.  If you’re wondering where to start, there are three specific types of grants you can apply for:

1.Subsidies for hiring a university student

We have found tremendous success in recruiting students. Maybe we were lucky, but we were able to hire some awesome students. With the right environment, students can do a lot of great work and there are many grants that subsidize their salaries. I suggest you go here to view some options.

2. SR&ED

The Scientific Research & Experimental Development (SR&ED) investment tax credit program offers very rewarding tax credits. You can apply for coverage of anywhere from 15-50 percent of eligible R&D costs. We’ve greatly benefited by filing SR&ED claims every year. The important thing to understand about SR&ED credits is that you have to do the work up front and then get the benefit/credits after you file your taxes.   


Unlike SR&ED credits that benefit you after the end of the tax year, IRAP acts like an investor who pays for a percentage of a project before hand. IRAP provides innovation and funding services customized to a company’s specific needs to help accelerate the growth of the business through innovation and technology. We have had great success with IRAP. It not only helped pay for parts of projects we are working on internally but also helped us make connections and discover other grants that are available to us. I strongly suggest you reach out to the IRAP program to see how they can help you.

The path of an entrepreneur is not a simple one. There are countless different ways for you to get to where you need to go, and it will vary from person to person depending on their situation. It’s all about choosing the ones that work best for you. Risk and uncertainty come with the glory of starting your own business, and let’s face it, a huge part of it is simply being in the right place at the right time. It’s a stressful passion you’ve chosen to pursue, but hopefully this list will at least give you a place to start.