Best Funding Options for Startups With No Revenue

Startups with no revenue face a unique challenge in raising capital, but it’s far from impossible to secure funding in the US. Innovative new businesses often begin as pre-revenue, meaning they haven’t yet generated income, yet they still need money to build products, hire talent, and grow.

Fortunately, a variety of funding sources exist for pre-revenue startups – ranging from personal savings and microloans to grants, crowdfunding, and investor seed capital. Each option has pros and cons in terms of repayment, equity, and eligibility.

This guide surveys the best funding options for startups with no revenue, covering U.S.-focused programs and strategies that can help founders launch and scale their businesses.

1. Bootstrapping and Personal Funding

Bootstrapping – using your own resources or tapping friends and family – is often the first step for a zero-revenue startup. This means funding the business with personal savings, credit cards, or loans from your network.

It has the advantage of no formal requirements or loss of control, but carries the risk that personal assets are on the line.

Personal Savings / Retirement Accounts: Many founders invest their own savings, retirement funds, or take out personal loans to cover startup costs. This requires no loan approval or giving up equity.

As one founder explains, bootstrapping shows investors you have “skin in the game”. However, it also means you personally assume all risk if the business fails.
Friends and Family: Borrowing from friends or family (with or without offering equity) is another common route. It’s often easier to secure than a bank loan because lenders trust you, but mixing personal relationships and money can be sensitive.

Shopify notes that friends/family may lend on better terms without credit checks, though these loans typically won’t build business credit. It’s crucial to treat this professionally – draw up simple agreements and discuss expectations.
Business Credit Cards and Personal Credit: For very early expenses, business or even personal credit cards can provide fast capital. According to financial experts, credit cards offer flexible, short-term funding when needed.

Many startups use credit cards to manage cash flow or pay initial bills. However, credit cards carry high interest rates and require good personal credit; any unpaid balance can hurt your credit score and make future funding harder. Always manage card debt carefully to avoid spiraling costs.

These self-funding methods do not require revenue or profitability, but founders should be aware of the risk to personal finances. Keep startup spending lean and track expenses carefully.

Document all personal contributions and loans (even informal) to maintain transparency. Many founders combine self-funding with other sources as the business grows.

2. Small Business Loans and Credit

SBA Microloans and Startup Loans

For startups with little or no revenue, traditional bank loans are usually out of reach. However, the U.S. Small Business Administration (SBA) offers microloan programs specifically for new small businesses.

The SBA microloan program provides funding up to $50,000 (average around $13,000) through nonprofit intermediary lenders. These loans can be used for working capital, inventory, equipment, or supplies.

Because the SBA backs the program, intermediaries may be more flexible with credit requirements, though they typically want a solid business plan and may require some collateral or personal guarantee.

Microlenders like Accion, LiftFund, Kiva and others participate in the SBA program or offer their own funds. For example, Kiva offers zero-interest microloans funded by backers, often $5k or less.

These options have more lenient terms and are designed for startups that “can’t qualify for other types of funding”. While still requiring some paperwork, SBA microloans are one of the few debt financing options accessible without existing revenue.

“SBA microloans are small loans up to $50,000 to help small businesses start up and expand. The average microloan is about $13,000.”

Larger SBA 7(a) and 504 loans generally require more business history, so most pre-revenue startups focus on microloans or other startup-friendly lenders.

Some specialized “startup loans” or credit unions may consider new businesses if owners have strong personal credit or collateral. If possible, prepare a business plan and financial projections; a good plan is often the key to securing any loan.

Lines of Credit and Equipment Financing

Another flexible option is a business line of credit. A line of credit functions like a credit card: a lender approves you for a maximum limit, and you borrow as needed, paying interest only on what you use.

Some online and community lenders may extend lines of credit to startups after only a few months of operation. For example, the SBA’s CAPLines program offers lines of credit to help seasonal businesses or contractors with cash flow. Interest rates on lines of credit can vary widely based on your creditworthiness.

Equipment financing is a debt option if your startup needs specific machinery or tech. The lender purchases the equipment for you and the equipment itself serves as collateral. This can be easier to obtain than an unsecured loan because the lender can repossess the item if you default.

Equipment loans typically require some credit check and may only cover certain types of assets. Though they involve repayment, equipment loans allow startups to acquire necessary tools without tying up all cash.

Business Credit Cards and P2P Lending

Business credit cards are a quick way to access capital for small expenses. Many issuers offer cards to very new businesses based on the owner’s personal credit.

A business credit card can cover operational costs or pilot projects, but balances must be repaid with interest. As noted, cards are best for short-term needs and must be used judiciously to avoid “damaging your credit score and future financing”.

Peer-to-peer (P2P) lending platforms like Prosper or Upstart match small business borrowers with individual lenders. These online platforms often have fast approval processes and use automated underwriting.

Some P2P platforms explicitly target startups or borrowers without extensive financial history. As Shopify explains, P2P loans can be faster than banks but may charge higher rates for very new businesses.

Typically, you’ll need some credit history or a strong business plan, but P2P can be more accessible than traditional loans for pre-revenue ventures.

Summary of Debt Financing

SBA Microloans: Up to $50k, available to new small businesses; often best for very early-stage funding.
Business Line of Credit: Variable credit line, interest on amount used; can help manage cash flow. Some online lenders allow lines after ~3 months of operation.
Equipment Financing: Loans secured by purchased equipment; useful if your startup needs specific machines or hardware.
Business Credit Cards: Convenient for immediate expenses, require repayment with interest. Flexible but high rates.
Peer-to-Peer Lending: Online platforms that may lend to startups without revenue, using P2P investors. Faster than banks; rates depend on credit.

While these debt options do not require giving up equity, they do require repayment with interest and often some guarantors or collateral. Startups with no revenue should be cautious about high-interest debt. For this reason, non-dilutive grants and alternative funding are very attractive when available.

3. Grants and Non-Dilutive Funding

One of the most appealing funding sources for pre-revenue startups is grant funding – money that you don’t have to repay and that doesn’t dilute ownership. In the US, many government agencies, large corporations, and nonprofit organizations offer grants or contests specifically for early-stage or tech startups.

Grants are extremely competitive and often have industry or mission focus, but they can provide significant capital without equity loss.

Federal R&D Grants (SBIR/STTR): The U.S. Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are premier sources of non-dilutive funding.

They fund innovative tech and R&D projects. For qualified science/tech startups, these grants can be substantial: SBA notes agencies may award up to about $314,000 for SBIR/STTR Phase I projects and up to $2.1 million for Phase II.

(Phase I grants are for proof-of-concept; Phase II for development.) While the application is rigorous, winning an SBIR/STTR grant also adds credibility.
Other Federal Grants: Various federal agencies fund industry-specific innovation. For example, the Department of Energy (DOE) offers grants for energy technology startups, the National Institutes of Health (NIH) funds health and biotech research, and the National Science Foundation (NSF) awards grants for scientific innovation.

These grants are large but very specialized. The Economic Development Administration (EDA) provides grants for business development in distressed areas.

Agencies like the Arts Endowment (NEA) even fund creative or design startups. A useful starting point is Grants.gov, the federal portal listing thousands of grants.
State and Local Grants: Many U.S. states, municipalities and economic development offices offer grants or matching funds for small businesses and startups, especially those creating jobs or advancing technology in the region.

For example, some states have small business innovation programs or funds for rural entrepreneurs. Local Small Business Development Centers (SBDCs) can help identify regional grants.

While state programs vary widely, they often target local priorities like manufacturing, clean energy, or community development.
Private and Corporate Grants: Nonprofits and corporations sometimes run competitions and grant programs for startups.

For instance, business plan contests, industry challenges, or brand-sponsored grants (like FedEx’s small business grant contest) periodically offer free funding. The NC IDEA grant example shows a modest startup raised $110,000 in grant money from various competitions.

Similarly, organizations like the National Association for the Self-Employed (NASE) award small grants to members. Such opportunities typically require alignment with specific goals or themes.

Importantly, grants do not require repayment or equity. As Rho’s analysis notes, “Grants can be attractive…because they do not require repayment,” making them a key non-dilutive option.

However, obtaining grants involves lengthy proposals, strict eligibility criteria, and intense competition. Even so, it pays to research and apply broadly to any grants fitting your startup’s industry or mission.

Table: Examples of Major Grant Programs (U.S.)

Program / Source	Focus/Eligibility	Award Type	Typical Amount
SBIR/STTR	U.S. small tech R&D businesses	Non-dilutive federal grant	Phase I up to ~$314K; Phase II up to ~$2.1M
SBIR/STTR (NIH)	Health and biotech R&D firms	(NIH-funded SBIR grants)	Varies; often ~$150K–$300K (Phase I)
DOE Grants	Energy technology startups	Non-dilutive federal grant	Up to hundreds of thousands or more
EDA Build to Scale	Economic development in distressed areas	Federal grant	Variable (often $100K+)
NSF SBIR	Science/tech startups (NSF)	Non-dilutive grant	~$300K (Phase I), up to $1M+ (Phase II)
State Innovation Grants	Varies by state (often tech, clean energy)	State grants	Typically $5K–$100K+ depending on program
Local Business Contests	Any new business (varies)	Prize/Grant	Varies (often <$50K)
Corporate Seed/Challenge Grants	Industry-focused competitions (e.g. small business contests)	Non-dilutive award	Varies (e.g. several thousand to $100K)

Many of the above (especially SBIR/STTR) require that the startup be U.S.-based and meet small business criteria (fewer than 500 employees). You usually need a solid technology or research plan.

Grant.gov and SBA resources can help find applicable grants. Remember: grant funding frees you from debt or giving up equity, but plan for the effort of the application process.

4. Angel Investors and Equity Financing

For startups with high growth potential, equity funding from angel investors or venture capital (VC) firms is a traditional route. Angels and early-stage VCs often understand that pre-revenue companies have no sales yet; they are mainly investing in the team and idea.

Angel Investors: These are wealthy individuals or groups who invest their own money in startups. Angels typically contribute anywhere from tens of thousands to a few hundred thousand dollars in a seed round.

They might use instruments like SAFEs or convertible notes (promises of future equity) to invest without setting a fixed valuation upfront. Crucially, “Angels often support pre-revenue startups that have high growth potential”.

An effective angel pitch should emphasize the team’s expertise, the market opportunity, and evidence of early traction (such as prototypes or pilot users).

Because angels invest personal funds, they may accept higher risk than banks would, but they still expect a clear plan for returns (usually 5–10 years out).
Venture Capital (Seed/Pre-Seed Funds): Some VC firms focus on very early stages and may invest in pre-revenue startups, especially those with cutting-edge or disruptive ideas.

However, VC funds generally look for an MVP, some user validation, or other traction before writing checks. Waveup notes that early-stage VCs “may take the risk and invest in pre-revenue startups,” but only if founders can show a clear path to monetization.

VC investments at this stage typically range from a few hundred thousand to a few million dollars (aggregated from multiple investors).

If you succeed in securing VC money, you give up partial ownership (dilution), but you gain professional guidance and networking.
Convertible Notes/SAFEs: These equity instruments are common for very early rounds. A convertible note is a loan that converts into equity at a future valuation; a SAFE (Simple Agreement for Future Equity) is a similar promise of future shares.

These allow you to raise funding without negotiating valuation immediately. Angels and seed VCs often prefer SAFEs for pre-revenue deals. While these terms don’t provide immediate facts to cite, they’re a standard tool in early-stage financing.
Investor Expectations: Even without revenue, investors expect you to demonstrate potential. That means having a strong vision and team, a plausible go-to-market plan, and any proof-of-interest (like a customer waiting list).

Pre-seed investors will scrutinize your financial forecasts and product roadmap. Emphasize milestones and how you will use their funds to achieve key goals (often called the “use of funds”).

As one guide advises, focus on showing the startup’s future profitability prospects, because without revenue to present, investors “focus more on your potential to become profitable”.

The equity route is highly dilutive (you give away part of the company) but can raise large amounts of capital that debt cannot match. It also brings accountability and support: most angel investors add mentorship and contacts. In fact, top accelerators double as investor groups (see next section).

Quick stat: Leading accelerator Y Combinator, which invests at the pre-revenue stage, reported that 75% of its Summer 2023 startups started with no revenue and 81% had never raised any funds. This shows that serious investors frequently back truly early-stage companies if the startup’s potential is strong.

5. Accelerator and Incubator Programs

Accelerators and incubators are structured programs that invest in startups (often at pre-seed/seed stage) and provide intensive mentorship, office space, and networking. In return, they typically take equity in the company.

These programs are ideal for pre-revenue startups because they offer both capital and resources to launch quickly.

Y Combinator (YC): YC is the best-known startup accelerator in the US. It offers a standard deal of $500,000 to each accepted startup: $125K for 7% equity, plus a $375K uncapped SAFE.

This deal (updated in 2022) is designed to cover living expenses and development so founders can focus on building their company. YC invests in very early teams—even those without a product or revenue.

As noted, in one recent cohort 75% of YC startups had no revenue at entry. YC’s curriculum and demo day give immense visibility to new startups.
Techstars and Others: Similarly, Techstars invests a fixed $220,000 in each startup it accepts (comprising $200K as a SAFE and $20K for ~5% equity).

Other prominent U.S. programs include 500 Global, Plug and Play, MassChallenge (no equity taken), and numerous university-affiliated accelerators.

These typically last 3–6 months and often end with a pitch day to investors. Because acceptance rates are low, startups should apply to many.
What Accelerators Offer: Beyond capital, accelerators provide mentorship, education, and community.

Waveup explains that accelerators “give not only money but also mentorship and resources… helping a pre-revenue company develop a product, get customers, and raise further funds”.

The hands-on guidance can be invaluable for founders new to entrepreneurship. Many alumni of accelerators go on to raise larger seed rounds.
Equity Taken: Nearly all U.S. accelerators take equity. For example, Techstars’ $220K comes in exchange for at least 5% of the company, and YC’s deal takes 7%.

Other accelerators vary in percentage and amount, but typical early deals are in the 5–10% range. Since accelerators are investors, they look for a team and idea with high growth potential, even if the startup has no customers yet.

Applying to an accelerator can be a powerful way to launch a pre-revenue startup. The deadlines and structured program force you to focus, and the payoff can be worth it: besides the upfront funding, accepted startups join a network of thousands of founders and mentors.

For example, Techstars boasts alumni companies valued at $150B+ in aggregate. Getting into an accelerator is competitive, but it remains one of the best growth engines for new ventures.

6. Crowdfunding and Pre-sales

Crowdfunding platforms allow entrepreneurs to raise money online from a broad audience. There are several crowdfunding models, some of which suit pre-revenue startups:

Donation-Based Crowdfunding: Platforms like GoFundMe let you raise money by pitching your idea to the general public. Donors contribute without expecting anything in return. This model works best for social enterprises or community-focused projects.

It’s essentially free money, but unpredictable and usually modest in amount. Shopify notes this model “doesn’t require you to offer financial rewards… and you also don’t need to repay donors”.
Rewards-Based Crowdfunding: Sites like Kickstarter and Indiegogo let you offer product “rewards” (like an early unit of your product or branded merchandise) in exchange for funding.

This is very effective for consumer products or creative projects. Successful rewards campaigns validate demand and provide upfront capital – essentially turning customers into funders.

For instance, one clothing startup aimed to raise $18K on Kickstarter and ended up with $26K. This approach lets you fund production without giving away equity or taking loans, but you must deliver the promised rewards on schedule.
Equity Crowdfunding: Under SEC regulations (Reg CF, Reg A+), accredited and non-accredited investors can buy shares in your startup online.

Platforms like StartEngine, Wefunder, and Republic host campaigns where startups sell actual equity or SAFE notes. Equity crowdfunding can raise significant sums (from hundreds of thousands up to a few million) from many small investors.

However, it involves regulatory compliance, ongoing reporting, and effectively managing a large shareholder base.

Shopify names some equity platforms (Fundable, StartEngine, CrowdCube). If your startup story resonates with retail investors, equity crowdfunding is a modern option for raising seed capital.
Pre-sales/Customer Commitments: Even outside formal crowdfunding, many startups secure early funding through pre-orders or letters of intent from customers. For example, a technology startup might get a customer to commit funds once the product ships.

This validates market demand and can be shown to lenders or investors. According to lending experts, “startups often use customer commitments and pre-orders to demonstrate market demand… serving as proof of concept”.

This strategy can be combined with crowdfunding – essentially you promise to deliver a product in exchange for upfront payments.

In summary, crowdfunding lets the public fund your startup. No revenue isn’t a barrier: you only need a compelling campaign and product story.

Just remember: donation and rewards crowdfunding give no equity but require you deliver on promises; equity crowdfunding gives money in exchange for ownership; and any campaign typically needs a well-crafted pitch and marketing effort.

7. Other Funding Avenues

Startup Competitions and Prizes: Many organizations hold contests for startups (often local business plan competitions, pitch events, or industry-specific challenges). Winners receive cash prizes or in-kind support.

These funds are typically grant-like (no equity) and can range from a few hundred to tens of thousands of dollars.

For example, university entrepreneurship contests and events like 43North or MIT $100K Startup Competition have awarded substantial prize money. Check local universities, business organizations, and tech meetups for such opportunities.
Co-founder Boot Grants: Some companies (like Visa or FedEx) run “boot camps” or “boot grant” contests for small business owners, offering grants to winners. These are highly competitive but worth researching.
SBIR/StTR Commercialization Support: Even beyond direct grants, the SBIR/STTR programs (through agencies) often link winning startups to incubators or provide mentoring.

Explore SBA’s America’s Seed Fund resources or local Small Business Innovation Research support programs to leverage additional funding or services.
Business Development Grants: Programs like the SBA’s Growth Accelerator Fund Competition or state technology accelerators occasionally offer startup grants, often aimed at underrepresented entrepreneurs or specific sectors. These require checking announcements on SBA and state websites.
Tax Credits: While not “funding” per se, U.S. tax credits (e.g. R&D credit) can reduce your cash tax burden, effectively increasing startup capital. Consult a tax professional to see if you qualify for federal or state R&D credits.

Each of these alternative sources won’t usually supply large sums alone, but they can add up or bridge gaps. For example, one startup might combine a small bank loan, a Kickstarter campaign, and a contest prize to fund product development.

The key is to use multiple channels: as NerdWallet emphasizes, “it can pay to know where to look for future financing”. Keep a calendar of grant and contest deadlines, and apply broadly wherever you qualify.

FAQs

Q: Can a startup with no revenue get funding from investors?

A: Yes. Many investors expect startups to be pre-revenue, especially at the pre-seed or seed stage. Angel investors and early-stage VCs often fund promising teams with no revenue if they see high growth potential and a solid plan.

Building some traction (like a prototype or user interest) can help convince them. Accelerators also routinely fund startups with no prior income (for example, 75% of Y Combinator’s S23 batch had no revenue).

Q: What loan options exist for startups without revenue?

A: Options include SBA microloans (up to $50K, often ~$13K average), business credit cards, and lines of credit from online lenders (sometimes after 3+ months of operation). Equipment financing and alternative lenders (peer-to-peer or specialized startup loans) are also possible.

These loans will require repayment with interest and usually some personal guarantee or collateral. In general, demonstrating a viable plan or providing collateral improves your chances, even without revenue.

Q: Are there grants available for startups with no revenue?

A: Absolutely. The U.S. government offers many grants for innovation (e.g. SBIR/STTR for tech startups). Other federal agencies (NIH, DOE, NSF) provide industry-specific grants. States and cities often have grant programs too.

Some corporations and nonprofits run grant competitions. Grants are highly competitive, but if you meet the eligibility (industry focus, size, location), they can provide non-repayable funding. Always search Grants.gov and contact local Small Business Development Centers for leads.

Q: How do I appeal to angel investors with no revenue?

A: Focus on potential and proof of concept. Angels will want to see a strong team, a clear problem/solution, and evidence of market interest. Show them prototypes, user sign-ups, or letters of intent – anything that indicates demand.

Also prepare detailed financial projections and explain how their investment will accelerate growth. Remember, they expect risk, but they need confidence in your vision and execution plan.

Q: Which accelerator should I apply to as a U.S. startup?

A: The “best” accelerator depends on your industry and goals. Y Combinator and Techstars are broad and highly prestigious (YC offers $500K in funding, Techstars $220K). There are many others: 500 Global, MassChallenge, AngelPad, and industry-specific or local programs.

Research accelerators’ focus areas and alumni. Applying to multiple programs increases your chances of acceptance. Admission is competitive, but a slot provides funding, mentorship, and a network.

Conclusion

Pre-revenue startups may face skepticism, but they are by no means left with no funding options. In the US, entrepreneurs can tap a wide spectrum of financing sources – from bootstrapping and microloans, to grants, crowdfunding, angel investment, and accelerator programs.

Each has its own trade-offs between equity dilution, repayment, and effort.

Non-dilutive funding (grants, competitions) and loans/credit allow you to raise capital without giving up ownership, though they require careful applications and repayment plans.
Equity funding (angels, VCs, accelerators, equity crowdfunding) brings larger sums and mentorship but requires selling a stake in your company.
Personal and network funding (savings, credit cards, friends/family) is often the quickest way to get started, but puts personal assets at risk.

In all cases, success without revenue depends on presenting a convincing vision and plan. Investors and lenders will look for a strong team, market research, and any early signs of demand.

As Waveup notes, being pre-revenue is not a sentence – it’s an opportunity to get creative about funding. With a compelling pitch, data-backed projections, and persistence in exploring multiple channels, even a startup with no current income can secure the resources to launch and grow.

The key is to match your startup’s stage and needs with the right funding strategy and to remain adaptable in a rapidly evolving entrepreneurial ecosystem.