• (c) friends and family

For new ventures, the owners invest their own capital as well as time and effort to give the business a strat. However, since the revenues are low while costs are high, the owners can opt to get more financing from other sources such as family and friends, bank loans, venture capitalists, and business angels.

Other than the owner's funds, the second source of funds for new ventures is friends and family. This category of financing can be a loan, a gift, or even equity which they exchange for part ownership of the business. The family or friends may also offer to work for free by providing expertise to the new venture or renting some space for the business to operate from.