---
title: Alternative Business Funding Outside of VC | Trends
description: Not every company needs to follow the seed, series ABC lifecycle. We share alternatives to traditional venture capital fundraising.
image: https://www.nlopchantamang.com/hubfs/Imported_Blog_Media/Screen-Shot-2019-11-12-at-1_24_12-PM-4.png
---

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# Alternative Business Funding Outside of VC

[ by Aja Frost @ajavuu ](https://www.nlopchantamang.com/trends/author/aja-frost-ajavuu)

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Venture capital can be deeply complex, but most firms still operate off the familiar model: make smart bets and hope that one pays off in the unicorn hunt. For that very reason, many firms will only bet on businesses that at least have the potential to “be the next Uber” or at least enter unicorn territory.

This “spray and pray” methodology means that it doesn’t matter if one, or two, or most of their bets fail, as long as one can deliver 100x returns. And only now, after the failure of WeWork, are venture firms realizing the importance of profitability (shocking, right?). The emphasis on getting the rare big bet to pay off influences the way that venture-backed companies need to operate: hypergrowth at all costs. 

Of course, this VC strategy leaves plenty of small and mid-sized businesses searching for funding. But entrepreneurs who can’t hook a major VC firm shouldn’t fret. Alternative business funding might even be the best strategy: We ran the numbers on our [small business database](https://trends.co/articles/inside-small-biz-database) and found that the median profitability of VC-backed companies was 44%, as opposed to the 60% margins on those financed by personal savings.

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