15 Ways to Finance Your Nature Startup

15 Ways to Finance Your Nature Startup

Embarking on a mission to create a wilder, more biodiverse world is noble and necessary. 

If you decide to walk this tricky but rewarding path, I am your biggest fan already.

Yet, the journey of transforming your wild dreams into tangible impact often hinges on one critical aspect: funding. 

It often is one of the major reasons why nature start-ups fail or get stuck. 

So this week, we dive into the various ways you can fuel your nature startup's growth, ensuring your venture thrives and scales sustainably.

15 Ways to Finance Your Nature Startup

1. Customer Pre-sales

• Explanation: Sell your product or service before it's fully available through your website or other formats.

• Example: A nature startup offering advanced orders for a revolutionary biodegradable planting pot.

• Pros: Generates early revenue and validates the market demand without diluting equity (the shares you hold in your own company).

• Cons: Requires a compelling product and trust from early customers; potential pressure to deliver as promised.

2. Immediate Revenue Streams

• Explanation: Leveraging your existing assets, skills, or products to generate income quickly.

• Example: Using your existing know-how to offer sustainable consultancy services and use the money to build your actual product. Sounds familiar? That's exactly the technique I am using. To finance Wildya, I am offering my skills to consult & execute ideas with Wild Business Mates. If I can do it, you can do it for sure!  

• Pros: Reduces initial funding needs & you are not dependent on anyone else.

• Cons: It may distract you from the core nature business focus and not be scalable in the long term.

3. Grants

• Explanation: Non-repayable funds provided by governments, foundations, or corporations to support projects with social, environmental, or scientific value.

• Example: Receiving a grant from the Environmental Protection Agency for a community reforestation project.

• Pros: No repayment or equity loss; often comes with prestige and additional support.

• Cons: Highly competitive, with stringent application processes and usage restrictions.

4. Competitions

• Explanation: Participating in contests where businesses pitch their ideas to win funding, support, and exposure.

• Example: Winning seed funding and mentorship in a green tech startup competition.

• Pros: Offers funding, networking, and publicity opportunities without giving up equity.

• Cons: Time-consuming with no guaranteed win; often requires substantial preparation.

5. Hackathons

• Explanation: These are events where entrepreneurs and developers collaborate intensively on software projects, often with a chance to win prizes or funding.

• Example: Developing an app during a hackathon that aids in tracking endangered species and winning development support.

• Pros: Encourages innovation and provides a platform to showcase your solution; potential to win funding or support.

• Cons: Not all projects are suitable for hackathons; success depends on a short-term intensive effort.

6. Incubators and Accelerators

• Explanation: Programs that support early-stage startups through mentorship, resources, and sometimes funding in exchange for equity.

• Example: Joining an accelerator specializing in environmental startups, receiving mentorship and seed funding.

• Pros: Access to valuable resources, mentorship, and networking opportunities can significantly accelerate growth.

• Cons: It often requires equity in exchange and a competitive application process.

7. Angel Investors

• Explanation: Wealthy individuals who provide capital for startups, usually in exchange for ownership equity.

• Example: Securing investment from an angel investor passionate about ocean conservation for a marine cleanup venture.

• Pros: Beyond capital, angels can offer expertise, networks, and flexible terms.

• Cons: Dilution of ownership; finding the right fit can be challenging.

8. Friends and Family

• Explanation: Raising funds from personal networks is often based on relationships rather than formal investment criteria.

• Example: Gathering initial seed money from relatives to kickstart an organic seed distribution platform.

• Pros: Accessible source of funding; may offer more forgiving terms.

• Cons: Potential personal relationship risks; limited funding amounts.

9. Venture Studio

• Explanation: Organizations that build startups using their ideas and resources, sometimes in partnership with entrepreneurs.

• Example: Collaborating with a venture studio to co-create a platform for tracking reforestation impact.

• Pros: Provides comprehensive support from idea to execution; reduces startup risks.

• Cons: Involves sharing control and equity of the business.

10. Crowdfunding

• Explanation: Raising small amounts of money from a large number of people, typically via the Internet.

• Example: Launching a crowdfunding campaign to fund the initial production of a sock company, where a profit percentage goes into conservation.

• Pros: Validates product demand; builds a community of supporters; no equity loss.

• Cons: Requires a compelling campaign and rewards; success is not guaranteed.

11. Crowd Investing

• Explanation: Similar to crowdfunding, backers receive company equity instead of products or rewards.

• Example: Offering equity in a wildlife conservation app through a platform.

• Pros: Access to capital without traditional loan requirements; builds a base of invested supporters.

• Cons: More regulatory complexity; involves sharing equity.

12. Tax Incentives

• Explanation: Deductions, credits, or exemptions offered by governments to encourage certain business activities, like green initiatives.

• Example: Utilizing a government tax credit for installing solar panels at your business premises.

• Pros: Reduces tax liabilities; incentivizes sustainable practices.

• Cons: Often subject to specific qualifying criteria and cap amounts.

13. Loans

• Explanation: Borrowing a fixed amount of money to be repaid with interest from banks or other financial institutions.

• Example: Taking a small business loan to expand eco-tourism operations in a national park.

• Pros: Provides immediate capital; no equity loss.

• Cons: Requires repayment with interest; may require collateral.

14. Revenue-Based Investment

• Explanation: Investors provide capital in exchange for a percentage of ongoing gross revenues.

• Example: Securing an investment where the investor receives 5% of monthly revenues until a predetermined return is met.

• Pros: Aligns investor and business interests; less burdensome than fixed loan repayments.

• Cons: Reduces cash flow during the repayment period.

15. VC Investment

• Explanation: Venture capitalists invest large sums in high-growth potential startups for equity and a say in company decisions.

• Example: A venture capital firm invests in a startup developing drone technology for forest monitoring.

• Pros: Access to significant funding and expertise can propel rapid growth.

• Cons: High expectations for growth and return; significant equity dilution.

Each financing method offers unique advantages and challenges. So, the best choice depends on your startup's specific needs, goals, and circumstances.

5 Actions to get your nature start-up some money next week

1. Assess your needs: Clearly define what you need funding for and how much.

2. Research options: Investigate each financing method to understand which aligns best with your venture's values and goals.

3. Prepare your pitch: Tailor your business pitch to resonate with the type of investors or funding sources you're targeting.

4. Network: Attend events to connect with potential investors, mentors, and peers in the nature sector.

5. Leverage resources: Make the most of available tools and platforms designed to help biodiversity businesses in securing funding.

Cheat Sheet: Financing Resources

Tools: 

Biodiversity Hero OS - By now, I have added 193 resources that are just about finance. Specific for nature ventures like yours. Like grants, competitions, nature VCs, angels, platforms etc. 

Boomark it & get cracking.

Here a few examples from it: 

WeFunder - Community investments made easy

Pale Blue Dot - Climate & nature VC

Operator Exchange - Group of skilled angel investors

Mulago Foundation - Grant that back innovative leaders in nature

Terratai - Nature venture builder studio

No money comes for free. 

But exploring the various ways to finance your nature startup opens up a world of possibilities for growth and impact. 

By carefully considering each option and taking strategic action, you can secure the funding needed to bring your joined vision of a wilder world to life. 

Remember, building a successful nature venture is as much about finding the proper support as having a great idea. 

Your venture can flourish and contribute significantly to creating a wilder world with the right financial backing.

Keep pushing boundaries, and let's create a wilder world together!

Have a wild week.

Best,

Oli

🌱 P.S. If you found this guide helpful, consider sharing it with a fellow ecopreneur. Together, we can make a bigger impact!

🦧 Whenever you are ready, there are 2 ways Wild Business Mates can help you grow and double your impact:

1. 1-to-1 business consulting. Detailed and personalized consulting to double the impact of your biodiversity organization in the shortest possible time. Book a free intro call. 

2. Wild Business Mates in Action. Wild Business Mates help you execute in areas you are struggling with. Tech, Marketing, Sales, Communication, etc. We can realize all the steps I mentioned above.