Are you a startup struggling to find funding? Try some alternative options |

Are you a startup struggling to find funding? Try some alternative options

Shavonnah Tièra Collins, founder of Las Vegas-based Urban Innovators, speaks during the UNR Innevation Center’s virtual panel discussion on alternative funding for startups on Sept. 2.
Courtesy Zoom

RENO, Nev. — Every new business idea, whether it’s for products or services, requires one vital thing: Money.

Funding is crucial for improving technology, hiring the right people, and launching a marketing strategy to get a foothold in the market.

However, sourcing enough money to start your new venture can be challenging. This is especially true for companies run by female, minority and LBGTQ+ entrepreneurs.

The numbers show as much. According to the Audacity Fund Reno, a field of interest fund at the Community Foundation of Western Nevada, less than 0.5% of venture funding supports Latino founders, only 1% backs Black founders, and only 2% flows to women-owned startups. What’s more, for every $1 that a white male business owner receives in capital, an underserved founder gets 33 cents.

“Those statistics, sadly, have not changed in over a decade,” said Kelly Northridge, managing partner of the Audacity Fund Reno. “We’re working hard, but things aren’t quite moving the needle.”

And those glaring figures reflected founders’ struggles to access capital before the coronavirus pandemic threw a wrench in the U.S. economy. 

With that in mind, the University of Nevada, Reno Innevation Center on Sept. 2 hosted a virtual panel discussion on alternative funding for startups.

Northridge, for one, said the Audacity Fund Reno is a proof-of-concept fund, helping business owners from underserved populations develop an idea from the planning phase into the startup phase through funding, education, training and support.

“We invest early in companies, where $50,000 or less would make an impact in growth,” said Northridge, noting the fund invests in everything from tech startups to “Main Street” businesses.

Northridge said the fund is working to help underserved entrepreneurs overcome “systemic bias” that exists in the financial system. Moreover, the Audacity Fund Reno is seeking to “change that conversation” with investors.

“We bring together new investors and show them the capacity that is there,” Northridge said. “And for investors who’ve been investing for a long time and are open and willing to learn, we provide training on all the different ways to look at these approaches that have been perpetuating these norms.”

Edward Vento, business development officer at Reno-based Prestamos CDFI, is also on a mission to help underserved founders — and founders of all stripes, for that matter — receive funding.

“We focus on areas in Reno where we see 20% or more poverty rates,” said Vento, noting Prestamos CDFI is a collateral and cash flow-based lender. “If you have a startup business and you’ve been to every bank in town, we will look at it and lend based on projections, and assign coaches to work with you.”


Meanwhile, investors likes Sage Growth Capital, which is based in Boise, Idaho, will provide revenue-based financing to startups. 

Molly Otter, investments partner at Sage Growth Capital, said this involves the investor taking a percentage of the company’s revenue every month until a predetermined amount has been paid.

“We just take a percentage of revenue and once you pay your multiple back, which for us is between 2x and 3x, the investment is complete,” Otter said. “We don’t do any personal guarantees; there’s no collateral; we’re not doing any warrants or any equity.”

What makes revenue-based financing different from debt financing is the fact that interest is not paid on an outstanding balance, and there are no fixed payments.

Otter said this is especially beneficial to companies with revenue-based financing that have had revenues slowed by the pandemic.

To that end, Otter said Sage Growth Capital focuses on industries with recurring revenue, such as SaaS (software as a service) companies.

“We are agnostic industry-wide,” Otter said. “We just want to make sure there’s some recurring nature. One-time, big-project companies are not going to work well for this type of financing.”


Another method to getting a business off the ground is bootstrapping.

In a nutshell, this means building a company from the ground up with nothing but personal savings and cash coming in from initial sales — and maybe a little luck.

According to Investopedia, more than 80% of small businesses rely on personal savings for their initial funds.

“It’s a way of saying, I’m going to invest in myself,” said Shavonnah Tièra Collins, founder of Las Vegas-based Urban Innovators, which teaches free programming to students 16 and older with little exposure to technology. “I’m going to allow my customers to invest in me or find other ways and resources that don’t necessarily require me to give either a piece of my company away or become indebted to a situation.”

Collins, who’s also a facilitator at Startup Weekend, said the biggest challenges of bootstrapping are finding your product-market fit and credibility.

However, she noted that many companies start on the bootstrapping path before climbing into the venture capital space.

“The majority of the business that you know and love are bootstrapped,” Collins said. “It doesn’t have to be your last destination; it can be your start.”