Franklin eyes

Sources of Capital

Where does business capital come from today?

According to an extensive study completed by the Kauffman Foundation, 59 percent of all business funding comes from a combination of business loans, credit lines, personal loans, business credit card debt, and personal credit card debt.

Interestingly, even though advice about attracting venture capital and angel investment is widely publicized, these sources combined only provide 6 percent of all business funding.

How much does this amount to?

We can calculate funding volume by extrapolating data from all venture capital and angel investments in a given year, which currently amount to about $36 billion. The total funding volume from all sources is therefore roughly $600 billion.

The category identified as Other should get your attention. It represents a wide range of funding options apart from the mainstream sources identified, and accounts for more than $100 billion of business funding. In other words, nearly three times more funding is available from Other sources than from all venture capital firms and angel investors combined.