top of page

Types of Fundraising

The ways for SMEs and startups to raise funds typically fall into the following three categories:

  1. Debt: Involves acquiring funds by promising a certain return.

  2. Equity: Involves relinquishing a portion of the ownership of the business to obtain funds.

  3. Grant: Only requires compliance with government policies, without giving out ownership or promising returns. 

There are often hybrid ways, such as

  1. Convertible Debt - a hybrid of debt and equity, and

  2. Government Guaranteed Loans - a hybrid of debt and grant

1 

Raising Funds from Debt Instruments

Raising funds from debt instruments is best suitable for enterprises:

  1. want to maintain ownership control;

  2. want to take tax advantages;

  3. require funds for specific projects or in a short term;

  4. have stable cash flow;

  5. have collaterals. 

2

Raising Funds from Equity Instruments

Raising funds from equity instruments is suitable for:​

  • Long term capital commitment;

  • Business expansion;

  • Entrepreneurial vision;

  • Early stage startups who lack of collateral, cash flow, etc. 

3

Raising Funds from Government Grants

Raising funds from government grants is suitable in various scenarios, especially for businesses and projects that align with government priorities and policies， such as:​

  • R&D projects;

  • Innovative startups;

  • Positive impacts on environments, economy, communities. 

Contact

Thanks for submitting!

bottom of page