Funding Options for Early-Stage Entrepreneurs

Young entrepreneurs are defined by their fresh, exciting ideas and passionate drive to succeed. Most, however, lack money—and the experience and connections to turn their concepts into viable businesses. So how do young startups land funding? The answer seems to be: any which way they can. Here's a look at several funding options and how twentysomething entrepreneurs might use them:

Self-funding. Joshua Schwadron, 28, was frustrated when he moved to New York City in 2006 and couldn't find the right people to cut his hair or coach him on public speaking. After it took five tries to find a great piano teacher, he dreamed up Betterfly. The website connects individuals with professional service providers that Schwadron calls "betterists." He hit on a unique way to fund his startup: Schwadron used $125,000 he had won as a contestant on the reality TV show while in college. After some early press, Betterfly attracted offers from a handful of venture capital firms. This summer the company secured just over $500,000 in Series A funding from Lightbank, a Chicago-based seed investor firm.