7 Ways for Students to Raise Capital for a College Startup


Students often struggle with raising startup capital. But with these 7 ways for students to raise capital for a college startup, you can learn how to get money to set up that business

Being a student entrepreneur is great. After all, many of the most successful businesspeople today had their beginnings as a college startup. But one thing is true for all businesses: they need funding to take off the ground. But how does a student who likely has limited finances get funds? In this post, we look at the 7 ways for students to raise capital for a college startup.

Ways to Secure Funding

  1. Fund it Yourself. When searching for startup funding, where better to dig into first than your own pockets? It’s unlikely that you will be able to cough up the entire cost yourself, but exerting the effort to scrape together whatever money you have can help offset some of the amount that you’ll have to look for elsewhere. Pooling in your personal savings and whatever other funds you can spare is a good start.
  2. Your Personal Network. It’s common practice for young entrepreneurs to begin raising funds by pitching their business to family and friends. If your personal network takes an interest, they can provide a sizable amount that will help in getting your business started.
  3. Consider Angel Investors. Angel investors are basically investors who are interested in funding startups in exchange for a stake in the business. But more than providing funds, angel investors can also act as mentors who’ll guide you as you grow your business, especially since many are always on the lookout for new business ideas that have great potential. There are different ways to look for angel investors, from attending conventions for entrepreneurs to joining online communities specifically designed to link entrepreneurs with investors.
  4. Crowdfunding. As the term suggests, crowdfunding involves raising capital through donations from the general public. In return, entrepreneurs can offer rewards or perks to donors once the business takes off. For instance, a number of websites allows you to set up a crowdfunding page for a fee or a portion of the amount you eventually raise.
  5. School Loans/Competitions. One of the often overlooked ways to get money for your business is right there in your school. Unknown to many, schools don’t just issue loans for academic expenses; a lot of schools also offer business startup grants. For instance, some schools hold competitions for the best business models. Like a great admission essay, your pitch should be excellent enough to snatch the student startup grant.
  6. Government and Government-Backed Loans. Taking out government loans or government-backed loans is also a great way to fund your startup, especially since interests rates are often favorable. For example, the US Small Business Administration connects entrepreneurs with lenders and may back as much as 90% of your loan if you qualify.
  7. Bank Loans. If you are confident that the business will prosper, you can opt to take out a bank loan. However, qualifying for a loan is more difficult than the other options mentioned, since banks need strong evidence that you’ll be able to repay them such as having an extremely promising business plan and good credit rating. Furthermore, interests may be higher than other loans.

While many students have great business ideas, a lot also struggle with the question of how to raise capital for a startup. But there are more ways for funding than most students realize. By considering one or more of these 7 ways for students to raise capital for a college startup, you come closer to bringing those business ideas from the drawing board to reality.

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