Finding Funding for a Kid-Led Venture

This is part two of a three-part series on youth entrepreneurship. You can read part one here.

Last week on this very platform, we heralded the notable news – that last year was one of the very best on record for becoming an entrepreneur. We coupled that news with a list of businesses suitable for launch by an aspiring teen entrepreneur. This week, we’re considering the next question likely on the minds of budding tycoons: how?

 After all, while launching a business can be an exciting and rewarding venture for kids, funding one can be downright elusive. Yet it doesn’t take a historian to notice that no shortage of billion-dollar ideas have been started by young people. So while funding is more difficult for minors, it isn’t impossible. Here are just a few ways that kids can secure the funding they need to turn their idea into reality:

1.     Start lean

Just as author Chris Guillebeau instructs grown-up entrepreneurs in his best-selling book, $100 Startup, kids can begin by developing a prototype or a minimum viable product (MVP) to test out their concept on a small scale. This allows them to prove their concept before investing a lot of money into it.

2.     Crowdfunding

Crowdfunding is a popular option for entrepreneurs of all ages, but is a step that shouldn’t be taken lightly. Yes, you can quickly create a campaign on crowdfunding platforms such as Kickstarter, GoFundMe, or Indiegogo, to raise funds for your business idea. A successful crowdfunding campaign typically involves creating a compelling video explaining your idea and its potential, while offer incentives to backers in exchange for their support. Consider those commitments seriously. If you promise a gadget in exchange for $40 in funding, your backers will be expecting to receive one.

3.     Grants

Many organizations offer grants to young entrepreneurs to help fund their business ideas. Research local grants that are available in their area and apply for them. Popular national grants for young entrepreneurs include the National Federation of Independent Business (NFIB) Young Entrepreneur Awards and the Global Student Entrepreneur Awards (GSEA).

4.     Personal Savings

Kids can also use their personal savings to fund their business idea. This is a great way to learn about financial management and budgeting. Once you have your own skin in the game, ask your parents to consider matching your savings! It never hurts to ask.

5.     Business loans

Although traditional business loans may not be a viable option for kids in most areas, micro-loans or small business loans offered by community organizations or credit unions might be. These loans often have lower interest rates and more flexible repayment terms.

6.     Partnership

If all else fails, consider partnering with other businesses or entrepreneurs to fund your business idea. This can be a helpful way to share resources, knowledge, and ideas. You may even acquire a mentor along the way!

Whether it's starting small, crowdfunding, applying for grants, using personal savings, seeking out loans, or partnering with others, creative paths can indeed be found that help young entrepreneurs bring their business ideas to life.

Being 18 isn’t all it’s cracked up to be.