VetIgnite

Funding 101

Different problems need different money.

A practical guide to every major form of capital available to a veteran-owned business, what each one costs, who it fits, and the trade-off you are actually signing up for. Read this before you reach out to anyone.

How to read these primers

  • Stage fit tells you when the capital is appropriate for your business maturity.
  • Dilution means how much of your company you give up. Loans and grants are zero. Equity is real.
  • Cost of capital is the true all-in price, interest plus expected return for equity.
  • Real talk is the part most guides skip. Read it twice.

Debt

SBA Loan (7(a), 504, Microloan)

Government-backed loans through banks. Lower rates and longer terms than a typical commercial loan.

Check size
$5K microloans up to $5M (7(a))
Cost of capital
Prime + 2.25% to prime + 4.75%, typical
Dilution
No dilution
Repayment
Fixed repayment
Stage fit
Early revenueGrowingScaling

Best for

Established businesses with 2+ years of revenue, real collateral, and a clear use of proceeds (working capital, equipment, real estate, refinance).

Watch-outs

Heavy paperwork. Expect 60 to 90 days end to end. Personal guarantee required. The bank, not the SBA, decides who qualifies.

Real talk

Most veterans qualify for more debt than they think but underestimate how much paperwork the bank wants. Build a relationship with an SBA Preferred Lender before you need the money.

For veterans: The Veterans Advantage program waives the upfront guarantee fee on 7(a) loans up to $350K. That saves real dollars at closing.

Examples: SBA 7(a), SBA 7(a) Veterans Advantage, SBA 504, SBA Microloan

Debt

Line of Credit / Working Capital Line

Revolving credit you draw on as needed for short-term needs.

Check size
$25K to $5M
Cost of capital
Prime + 1% to prime + 6%
Dilution
No dilution
Repayment
Variable repayment
Stage fit
Early revenueGrowingScalingMature

Best for

Smoothing cash flow gaps, covering payroll between invoices, opportunistic inventory buys.

Watch-outs

Easy to draw down to fund operating losses. If you cannot pay it back inside 12 months, it is a structural problem, not a cash-flow one.

Real talk

Set this up before you need it. Banks lend to people who do not appear desperate. Even a $50K line you never use is a strategic asset.

Non-dilutive

Grants and Foundation Awards

Free money for specific use cases. Highly competitive.

Check size
$5K to $250K typical, occasional six-figure awards
Cost of capital
Application time + reporting overhead
Dilution
No dilution
Repayment
No repayment
Stage fit
IdeaPre-revenueEarly revenueGrowing

Best for

Veteran-owned businesses, R&D, social impact, women/minority-owned, specific industries (defense innovation, clean energy, ag-tech).

Watch-outs

Reporting requirements can be heavier than the grant is worth. Always read the use restrictions before accepting.

Real talk

Treat grants as accelerants. Build the business as if you will get zero, and treat any grant as a bonus.

For veterans: StreetShares, Second Service Foundation, Hivers and Strivers, and Bunker Labs all run grants reserved for vets.

Equity

Angel Investors

Wealthy individuals who write personal checks, often with operating experience.

Check size
$25K to $500K
Cost of capital
10 to 25% dilution per round
Dilution
Moderate dilution
Repayment
Repaid at exit
Stage fit
Pre-revenueEarly revenueGrowing

Best for

Scalable businesses where the angel's expertise and network matter as much as the money.

Watch-outs

Bad-fit angels can slow you down. Choose for what they have built, not what they can write.

Real talk

The right angel saves you from three bad decisions and introduces you to your seed lead. The wrong angel gives you advice from twenty years ago.

For veterans: Hivers and Strivers and SABM Group are veteran-led angel networks. Different filter. Same diligence applies.

Equity

Venture Capital

Funds raising from limited partners that write $1M to $50M+ checks expecting 10x returns.

Check size
$1M to $50M+
Cost of capital
15 to 30% dilution per round, board seats, control terms
Dilution
High dilution
Repayment
Repaid at exit
Stage fit
GrowingScaling

Best for

Tech-enabled, software-margin, network-effects businesses with a believable path to $100M+ revenue in 5 to 7 years.

Watch-outs

If your business does not need to be venture-scale, taking VC will hurt you. They need outcomes most businesses cannot deliver.

Real talk

VC is fast capital with strong governance and short patience. Most veteran-owned services businesses should not raise VC at all.

Hybrid

SBIC (Small Business Investment Company)

SBA-licensed funds that combine government leverage with private capital to invest debt and equity.

Check size
$1M to $50M
Cost of capital
Equity dilution + interest on debt portion
Dilution
Moderate dilution
Repayment
Fixed repayment
Stage fit
GrowingScalingMature

Best for

Established businesses that want patient capital without the maximum-pressure VC outcome.

Watch-outs

Highly regulated. Slower than typical PE close. Some SBICs have specific industry mandates.

Real talk

SBICs are the most underused capital source in the veteran ecosystem. Many are explicitly mandated to support small business and several have veteran-friendly histories.

Hybrid

Revenue-Based Financing

Capital you repay as a fixed percentage of monthly revenue until a cap is hit.

Check size
$50K to $5M
Cost of capital
1.3x, 2.0x cap multiple over 24 to 60 months
Dilution
No dilution
Repayment
Variable repayment
Stage fit
Early revenueGrowingScaling

Best for

Subscription, SaaS, e-commerce, and other businesses with predictable recurring revenue.

Watch-outs

Effective interest rates can exceed 20% APR. Read the cap and term carefully before signing.

Real talk

Useful as a bridge between rounds or to scale ad spend without dilution. If you qualify for a traditional loan, take that first.