The Side Hustle Show: Episode 690 – 9 Ways to Get Money to Start Your Side Hustle
Release Date: August 11, 2025
In Episode 690 of The Side Hustle Show, host Nick Loper and co-host Danielle Dicier Corbett delve deep into one of the most common challenges faced by aspiring entrepreneurs: securing the necessary funds to launch a side hustle. Drawing from their extensive experience and real-life examples from past guests, they outline nine effective funding strategies tailored for side hustlers. This comprehensive summary captures the essence of their discussion, complete with notable quotes and timestamps to guide you through each funding method.
Introduction: The Funding Conundrum
Nick and Danielle kick off the episode by addressing a prevalent issue among side hustlers: the need for startup capital. According to their annual surveys, the top struggles for side hustle show listeners include:
- Time Management – "Time I don't have enough time to do this thing." ([00:23])
- Funding – "Money, I need the startup costs, ideas." ([00:25])
- Idea Generation – "I don't know what idea to start." ([00:27])
- Marketing and Growth – "Marketing and growth." ([00:29])
They cite CB Insights, noting that 38% of startups fail due to an inability to raise new capital ([00:31]).
1. Bootstrapping
Bootstrapping is the cornerstone of most side hustles, where entrepreneurs use their personal savings and resources to fund their ventures. Danielle shares her journey:
"I edited the show myself for the first three years. This example of, you know, starting really lean." ([04:14])
Key Points:
- Ownership Preservation: Maintain full ownership without owing interests to external parties.
- Lean Operations: Focus on essentials and limit unnecessary expenses.
- Examples: Danielle used her day job salary to fund her podcast startup, treating her job as a "silent partner" ([02:38]).
Notable Quote:
"It's about stretching your dollars. It's about doing more with less and really keeping that overhead low." – Danielle ([04:20])
2. Friends and Family
Raising funds from friends and family involves seeking financial support from your inner circle. While it can be a quick way to secure capital, it comes with potential risks to personal relationships.
Danielle emphasizes caution:
"You never want to rush into it because if it doesn't work out, this could be a strain on relationships." ([06:18])
Example: Kat Block from Episode 471 shares her experience:
"I put the deposit of this photo booth on my parents' emergency credit card. And I was like, I don't have like 30 days to explain what this charge is." ([07:28])
Key Considerations:
- Transparency: Clearly communicate your business vision, potential risks, and rewards.
- Relationship Management: Ensure that both parties understand the terms to avoid future conflicts.
3. Business Credit Cards
Using business credit cards can provide immediate capital but should be approached with caution due to high-interest rates.
Danielle advises:
"It's probably a funding strategy of last resort because the interest rates are so, so high there." ([09:40])
Advantages:
- Access to Funds: Even new businesses with limited revenue might qualify.
- Perks: Cash back, travel points, and discounts on business-related purchases.
Warnings:
- High Interest Rates: Potential debt accumulation if not managed properly.
- Repayment Plan: Ensure a clear strategy to pay back the borrowed amount swiftly.
4. Bank Loans
Bank loans and other forms of debt financing are traditional methods to secure capital while maintaining ownership of your business.
Key Points:
- Repayment Terms: Loans must be repaid with interest over a specified period.
- Variety of Sources: Includes banks, credit unions, and specialized lenders.
Example: Patagonia's expansion in the 90s leveraged bank loans to fund growth without diluting ownership ([11:08]).
Notable Quote:
"It's a way to finance growth while preserving ownership and control." – Danielle ([11:43])
5. Pre-Sell Your Solution
Pre-selling involves offering your product or service before it’s fully developed, allowing you to generate funds based on customer interest.
Danielle's Strategy:
"I did this for a couple different digital products. I validated the idea before I invested in building it." ([15:24])
Steps to Pre-Sell:
- Create a Description: Outline what the product will offer.
- Offer Pre-Orders: Provide the product at a discounted rate for early supporters.
- Validate Demand: Use the pre-sales to gauge market interest before full-scale development.
Example: Abby Ashley from her virtual assistant training business:
"I had about 16 people buy from my list of a thousand. So I made $8,000 from doing that tactic." ([17:17])
Benefits:
- Market Validation: Ensures there’s demand before significant investment.
- Cash Flow: Generates funds to further develop the product.
6. Crowdfunding
Crowdfunding platforms like Kickstarter allow you to raise small amounts of money from a large number of people online.
Key Points:
- Types of Crowdfunding:
- Rewards-Based: Backers receive a product or perk.
- Equity Crowdfunding: Backers receive shares in the company.
- Donation-Based: Backers donate without expecting returns.
Example: John Lee Dumas raised over $100,000 for his Freedom Journal on Kickstarter ([23:45]).
Notable Quote:
"If you already have an existing audience, that's great. You can put that out to your people." – Nick ([24:30])
Considerations:
- Audience Requirement: Successful campaigns often need an existing supporter base.
- Marketing Effort: Requires significant promotion to reach funding goals.
7. Grants
Grants provide non-repayable funds to support specific projects or business initiatives.
Danielle's Insights:
"I won a handful of grants to start my podcasting business. That's a thing. That's an option." ([25:54])
Key Points:
- Competitive: Highly sought after with stringent application criteria.
- Usage Restrictions: Funds often must be used for specific purposes outlined by the grantor.
Examples of Grant Sources:
- Government Agencies: e.g., Grants.gov lists over 2,700 grant programs.
- Private Companies: e.g., Capital One, Verizon.
- Nonprofits and Foundations.
Notable Quote:
"Grants don't have to be repaid, but there are quite a bit of hoops for you to typically jump through." – Danielle ([28:14])
Tips:
- Research Thoroughly: Understand the requirements and ensure your business aligns with the grant’s objectives.
- Prepare Detailed Proposals: Clearly outline how the funds will be utilized to meet the grant’s goals.
8. Angel Investors
Angel investors are high-net-worth individuals who provide capital in exchange for ownership equity or convertible debt.
John Logar's Experience:
"I sat back down and there was a lady who slid me a note saying, 'How much money are you talking about?' I wrote back $50 grand minimum, preferably $100 grand.'" ([32:25])
Key Points:
- Networking Essential: Building relationships is crucial to attracting angel investors.
- Flexible Terms: Compared to hard money lenders, angel investors often offer more favorable terms.
Example: Austin Miller raised $2,400 by leveraging connections and strategic quoting with investors via platforms like Upwork ([21:49]).
Notable Quote:
"Terms are what you make them. You’re in the driver's seat in terms of interest and terms." – John Logar ([34:31])
Benefits:
- Additional Resources: Beyond capital, angel investors can offer mentorship and industry connections.
- Higher Funding Amounts: Suitable for larger projects needing substantial investment.
9. Equipment Financing
Equipment financing secures funds specifically for purchasing machinery, technology, or other essential equipment needed to run your business.
Danielle’s Insights:
"Equipment purchases, according to Forbes, are the second most popular reason that businesses are looking for loans." ([35:55])
Key Points:
- Types of Financing:
- Short-Term Loans: Repayments are made over a short period.
- Leases: Renting equipment with the option to purchase later.
- Rent-to-Own Plans: Gradually paying towards ownership.
Example: Anthony Koloje from Episode 662 discusses financing vending machines:
"One of those machines that I bought was like nine grand and was doing like $2,500 a month. So my net payment was around $800... I’m making like 100% return." ([37:22])
Benefits:
- Preserve Working Capital: Allows you to acquire necessary equipment without depleting your cash reserves.
- Predictable Payments: Fixed repayment schedules help in financial planning.
Considerations:
- Credit Requirements: Strong credit may be necessary to secure favorable terms.
- Depreciation and Maintenance: Factor in additional costs associated with equipment upkeep.
Summary: Choosing the Right Funding Strategy
Nick and Danielle wrap up the episode by reiterating the importance of evaluating each funding option’s pros and cons to determine the best fit for your specific side hustle. They emphasize:
- Bootstrapping is ideal for maintaining full control but requires personal investment.
- Friends and Family can provide quick funds but risk personal relationships.
- Business Credit Cards offer immediate access to funds with high-interest rates.
- Bank Loans are traditional and maintain ownership but require repayment with interest.
- Pre-Selling Solutions helps validate ideas and secure funds based on demand.
- Crowdfunding leverages community support but often needs a strong initial audience.
- Grants offer non-repayable funds with specific usage conditions.
- Angel Investors provide substantial capital and mentorship but require equity sharing.
- Equipment Financing allows for necessary purchases without draining cash reserves, perfect for equipment-intensive businesses.
Final Thoughts:
"Don't bite off more risk than you can chew and protect your downside." – Danielle ([46:05])
The episode concludes with an invitation for listeners to share their unique funding strategies, fostering a community of support and knowledge-sharing among entrepreneurs.
Key Takeaways:
- Diverse Funding Options: There’s no one-size-fits-all; choose based on your business needs and risk tolerance.
- Balance Ownership and Debt: Weigh the benefits of retaining full control against the necessity of external funding.
- Strategic Planning: Ensure that whichever method you choose aligns with your business model and long-term goals.
- Community and Networking: Building a strong network can open doors to various funding opportunities, especially through angel investors and pre-sales.
By exploring these nine funding strategies, The Side Hustle Show equips aspiring entrepreneurs with the tools and knowledge to confidently secure the capital needed to transform their ideas into thriving businesses.