How to get capital without giving up equity 🎨

When Eric Bahn (one of our general partners at Hustle Fund) launched his first startup, he pitched over 100 investors for capital. How much money do you think he raised?

Multiply your guess by zero… and you’ll have the right answer. 🤑

Everyone rejected Eric. But he was still able to get access to over $250k in funding without giving up any equity. 

How’d he do this? 

Eric found money through non-dilutive sources of capital. These are things like:

  1. Bootstrapping
  2. Alternative lending models (like Paintbrush)
  3. Crowdfunding
  4. Government programs
  5. Go to a bank

And even though Hustle Fund is a venture capital firm, we actually recommend founders consider these routes before pitching investors. 

Why? Because raising from VCs means that founders have to give up partial ownership of their company.

In the beginning that could be just 5-20% of the business, which may not seem like a lot when your company is just starting out. But that 5-20% could be worth a ton of money when you IPO or exit down the line. 

As a founder, you should know all your funding options. So in this issue of The Founder Playbook, I’ll break down each source and let you decide what’s best for you. 


Bootstrapping is when you don’t raise capital and make money by profitably growing your business.

We think this is the absolute gold standard to run a company if you have a path to profitability. 

But there’s a chicken-and-egg problem. You need money to start and scale a business. But you can’t earn money until you have a viable business. And you can’t build a viable business until you have funding.

Some founders are lucky enough to have a family with enough disposable income to help jumpstart their business. Other people work corporate jobs for years and save up a nest egg to fund their company.

Many founders won’t be able to take either of those paths. And while you could certainly try to find a workaround, it might make sense to explore one of the other four funding options we listed at the top of this article, like…

Alternative lending models

Paintbrush is a great example of a company trying to solve the chicken-and-egg problem. They offer $50k loans to founders who simply have an idea and want to get started ASAP. 

You can fill out an application in 10 minutes with no revenue requirements or pitching. If it’s a good fit, you’ll receive $50k the next day.

This will should give you enough runway to build your MVP, conduct user research, run marketing campaigns, etc. From there, you may be able to bootstrap to profitability, or leverage your growth to raise from VCs.

The goal of companies like Paintbrush is to give smart people access to the money and confidence they need to quit their day job and pursue their startup full time. So if you need a bit of cash to get your startup going, check out Paintbrush. 🎨


Crowdfunding is when you raise money through platforms like Kickstarter or GoFundMe to fund a project before it’s actually launched. It’s a way to finance companies by tapping into the exact audience that wants to see the product come to life.

Real talk: crowdfunding tends to work best for consumer products. Back in 2016, I pre-ordered a backpack from a company Minaal. They put up a great landing page with a cool video and generated $707,631 before shipping any product. 

As a founder, it’s amazing to have all that capital upfront before going out-of-pocket to manufacture your product. But crowdfunding may not be as effective if you’re an enterprise SaaS company. 

Government programs

Tech founders often overlook government programs that can provide funding solutions. 

In the United States, there’s a program called the SBIC. It’s a traditional lender for small businesses of all types, and has been around for years. Apparently the application process isn’t absolutely horrific, and founders have received substantial loans on pretty good terms. 

Canada also has programs for startups, including one called SR&ED. Some of our Canadian founders have received millions of dollars of non-dilutive capital to support their entrepreneurial journey.

If you’re outside of North America, it’s worth researching options in your city or municipality to fund your company. Many local governments see the value of building local startup hubs, and create these programs to generate jobs and revenue for their citizens.

Go to a bank

This might not be the easiest option but if your company has some traction, it’s possible to apply for a line of credit from a bank.  

They look at traditional items like your business history, annual revenue, and business plan. And even though it’s kinda old-school… this option does work.

15 years ago, Eric had just finished slurping a bowl of ramen and started walking home from the restaurant. He passed by a CHASE bank and wondered what would happen if he went in and asked for money.

Within an hour, Eric walked away with a $250k line of credit. It was that simple. It wasn’t easy… after all, Eric was able to show solid traction within the business. But it was a simple process. 

This would be more difficult if your startup is still super early.

Which alternative form of capital is appropriate for you?

We’ll say it louder for people in the back.

These alternative sources of capital will allow you to maintain ownership of your company. 

The key is to get funding on good terms. But be careful about personally guaranteeing anything. Some forms of alternative financing require you to personally collateralize an asset you own, like your house.

Paintbrush doesn’t do that, but more traditional forms of funding may have it in their terms and conditions. So read everything carefully and make the best decision for yourself.