Financial Post | Ryan Holmes | Sep 11, 2015

It’s a good time to be a startup in Canada. Venture capital investing in the first half of 2015 reached $1.19 billion, the largest value in more than a decade. Funding, which for so long has been in short supply here, is finally flowing.

Tapping into it, however, isn’t always easy. For entrepreneurs with a vision — but not much else in the way of resources — understanding the myriad funding options available to startups can be overwhelming. It was for me when I was getting Hootsuite off the ground in 2008. And in the past few years a host of new tools have emerged. Here are some early-stage funding options to explore:

When in doubt, bootstrap In 2000, I started Invoke — the company that would develop the Hootsuite social media management tool — in my apartment with what was left of the proceeds of the sale of the pizza restaurant I had been running a year earlier.

Bootstrapping (using your own personal resources, however modest, to start a business) is the easiest and probably most common way to fund a startup. There’s nothing fancy about it and, in my mind, that’s the whole point. You don’t have to convince investors about the merits of your idea, you only have to convince yourself. And even if you don’t have a lot of money in the bank, a little plastic can go a long way.

Love money Lots of people are uncomfortable with the idea of approaching family and friends for startup funds. I get that. But once your personal resources are exhausted, it’s an option worth keeping on the table, whether or not you use it. For starters, it can be a reality check. If you don’t believe in your vision enough to approach the people you’re close to, then maybe it’s not quite as promising as you think. Furthermore, pressure to make good on those investments can be a supremely powerful motivator.

See:

• Canadian Crowdfunding Director (Capital networks, platforms, providers)

• Seeking a loan? Startup Lending Loop is bringing P2P Lending to Canada this September

If you do go this route, it’s key to be transparent about risks and expectations from the start, because those closest to you have a tendency to overestimate your prospects of success. Similarly, spelling out the terms and type of investment with a shareholders’ agreement can avoid tensions down the road.

Harness the crowd If Kickstarter and Indiegogo had been around when Hootsuite was getting off the ground, I probably would have been an early adopter. The premise of crowdfunding sites is pretty straightforward — in exchange for making online pledges to your company, supporters can pre-buy your product or get perks such as T-shirts or signed merchandise. Individual pledges may seem like “small change,” but strong product ideas can generate literally millions of dollars in contributions. Pebble, for example, raised US$20 million for its smartwatch.

Crowdfunding allows you to raise substantial money in a short time without sacrificing any equity. A successful campaign can also be valuable proof your product has a market (useful when seeking funding from institutional sources). However, it’s not for everyone. Consumer-focused companies in the later stages of product development seem to do best.

It’s worth noting that new securities regulations in the U.S. this year have opened equity crowdfunding to everyone, not just accredited investors who must meet relatively high net worth or income requirements.

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