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Funding, Starting A Business, Students in Business

Starting Your College Business Without VC Funding

College Start Your College Business Without VC Funding

Starting Your College Business Without VC Funding

If you’re an entrepreneurial sort, especially an entrepreneurial sort pursuing a degree and later a career in business, it’s way better to have a part-time college business than a part-time college job. If it never blooms into a full-time concern, you make a little beer money and build both your resume and practical experience. If it does become a “real” business, you have an automatic job after graduation.

Trouble is, venture capitalists won’t touch a student-run business with a ten-foot high-interest loan. There’s just not anybody experienced enough in the driver’s seat. That doesn’t mean you can’t fund an operation between study sessions. You just have to get more creative. For example:

True Bootstrapping

College businesses don’t have to start huge. A small operation with low expenses can buy you some pizza while leaving enough to expand just a little next semester. And that slightly-expanded business can generate enough to expand further with each cycle. By senior year, you can have grown your company enough to try it full time once you get your degree. This doesn’t work for all models, but can be the cheapest way to build your business while letting you scale effort.

Financial Aid

If you get a good student loan or student grant offer, you will receive more funds than you need for tuition and books. Those are intended for living expenses so you don’t have to work as much during school, but if you find a way to live for cheap you could use the excess to invest in your company. This is a good news/bad news situation. The good news is student loans often have lower interest rates than other forms of credit. The bad news is they stick with you even after a bankruptcy. Think carefully before using this funding source.

Credit Cards

At the beginning of each semester, you’ll find kiosks offering credit cards to new students. Those cards have low limits, but might offer enough advance money to get your business off the ground. Be careful here: these are high-risk cards to the bank, and come with super-high interest and fees. It’s likely the priciest way to fund your company, so look to other options before falling back on this. Alternatively, keep a card open as an emergency fund while getting your main capital from elsewhere.

Mom and Dad

If you go this route, you won’t be the first young entrepreneur to get starting funds from parents or other family members. It’s between you and your relative whether this money is a loan, a gift, or an investment against future corporate earnings. It’s not that important which form the money takes, but it’s very important that everybody agree what it is. You accepting as a gift what was meant as a loan can seriously strain Christmas dinners for years to come.

Student Groups

Some universities (and community colleges and trade schools) have entrepreneurial groups on campus that mentor students interested in starting their own businesses. Some of these offer either direct grants or help getting access to grants available to student entrepreneurs. Even if student groups at your college don’t offer the funding, it’s good to get involved. You’ll have access to mentoring, work space, tools, and expertise you won’t find on your own.

Grants for Students

National, state, local, and special district entities all offer various grants for students, women, minorities, and others to help them start a business no matter what stage of life they’re in. Many trade organizations, local Chambers of Commerce, service groups like Elks and Rotary, and student unions also provide some funding. Research everything you can about where to access funds like this. You might be surprised how many options exist. (One advantage of this particular option is that, if you’re a student who had to hustle to find scholarships, you already have strong recent experience in finding the best groups to fund your needs).

Online Lenders

Banks and credit unions are a nonstarter for funding a college business. The principles have neither the experience nor the credit history to attract their interest. Online lenders are different. They analyze whether or not to fund a small business based on projected income, industry statistics, and the strength of the business model. Although these loans are often more expensive than a traditional bank loan, your potential profits still make them cost effective.


Bottom line: being a college student doesn’t mean you have to go without funding for your Great Big Idea. It just means you might have to hunt a little further to get that funding in place. Any of the above ideas, or a combination of two or three, might be just what you need to make it happen.