How to fund & finance your vegan business

You might think if you just come up with a great idea then an investor will throw money at your business. Well, I’m afraid it (usually!) doesn’t work like that.

We look at the five different ways that you can fund the growth of your vegan business, from self-funding and borrowing, to investment and crowdfunding.

If you have a vegan business, then I know that you probably didn’t start it because of the money. In fact, sometimes it seem that vegans hate making money! We can view it as unethical or that we shouldn’t make money from the vegan cause, but for your business, money is like electricity. If it stops, everything stops. And sometimes there is no practical way to take your vegan business to the next phase without having to put more money into it than you currently have in the bank.

I have seen good businesses plateau, or even fail, because the owners got to the limit of both their expertise and spending power. They knew they had a great business, but to expand that business they needed to hire staff, pay for more marketing or even buy equipment or premises. But because the business  couldn’t generate that extra cash, it never happened. 

But imagine the extra impact your business could have if it had a cash injection to scale up, or to bring in more staff so that you could grow your operations. Imagine how many more people your business would be able to reach with the proper funding. And that’s the main reason we’re all here: our businesses are our form of vegan activism. So you owe it to the vegan cause to make your businesses as successful as possible so that you can make a far bigger impact on the world. And if you want to do that, then you’ll need money.

The five main options

So let’s take a look at the options. If you need money for your business to grow, but you don’t have that money in the bank, what are the ways forward? Well, there are five main ways you can get funded:

  1. You can self-generate the money you need through ongoing operations – i.e., you just wait until your business has generating enough cash to fund itself without needing to borrow, or you do things to accelerate that, like increasing your prices or cutting your overheads.
  2. You can borrow it from a bank or other commercial lender;
  3. You can borrow it from friends and family or another private lender, or even lend your own personal money to your business;
  4. You can sell ownership or equity in your business to an investor or group of investors in return for cash;
  5. You can offer rewards or do pre-sales through a crowd-funder.

There are also a couple of other more ‘creative’ ways to get cash by thinking outside of the box. Don’t worry, we’re not talking about robbing banks, and I’ll go into those later too!

So let’s go through each of those options in a bit more detail, because  by the end of this guide I want you to have worked out which one of these options are going to be right for your business so that you can research further and start planning the next step.


1. Self-funding

The first option is self-funding your business’s growth and expansion. In terms of risk, self-funding is probably the lowest because you are using the profit that your business generates from its day-to-day sales and operations, meaning it’s money that you don’t need to repay to anyone. If you have a successful business that is generating cash then this is often the easiest thing you can do. You don’t need to pay interest, you don’t need to give away part-ownership of the business and you have ultimate control over how you spend that money without having to justify yourself to shareholders or bank-managers.

This can be especially important for vegan business owners. Having to justify your business growth plan to someone who just doesn’t get the concept of a vegan business can be really frustrating. Or if you have to give up part-ownership of the business to an investor who doesn’t share your values or vegan ethics, then there’s no guarantee that they will agree with some of your decisions further down the line either. If your business isn’t generating extra money at the moment to re-invest, then you might decide to put your prices up so that you can generate more money to grow or look at cutting your overheads. Most businesses I’ve worked with have been able to simply put up their prices 5 or 10% across the board without any negative impact and it’s a been a fairly easy way to increase cashflow. Or you might decide to introduce some other revenue stream into your business to generate cash to spend on growth and expansion, or maybe you have some assets that can be sold, such as property or equipment you don’t use anymore.

And this is how a lot of businesses fund growth or first get off the ground, mainly because they have no other option!

Few people will give you money for a new business idea, so a lot of people start their business as a side-hustle until it’s made enough money for the founder to go full time. It’s not the quickest way to build a business, but it’s a tried and tested route that allows you to prove an idea before spending lots of money on it, and it allows you to retain 100% ownership of that idea.


2. Bank and commercial loans

The second way to fund a business is by going, cap in hand, to your local bank manager and convincing them that you’ve got this amazing business – and that if they give you access to a lump of money, then that’s going to mean the business will grow and be able to pay that money back with interest.

Well, that was how it happened many years ago, but no longer I’m afraid! A bank deciding to lend money to your business now comes down to one thing: whether you pass their algorithm or not. Humans have been mostly removed from the decision-making process. So no matter how good a plan or idea you have, if your balance sheet and what security you have to offer doesn’t give you the right score, then the bank simply won’t lend you the money.

If your business is generating the right amount of revenue and can show three years of good trading history, or if you have tangible assets to offer as security, such as equipment or property, then there’s a good chance that a bank is going to lend you money. If you don’t have all those, you won’t even get past the first online form.

There are always other commercial lending options (there are lenders other than banks) especially if you just need a short-term loan to get past a dip in cashflow. You can also use credit facilities such as overdrafts or even credit cards, but they all come with higher associated costs and interest rates and none are really a good long-term options.

A bank may suggest a guarantor on a loan if your company can’t get past the algorithm, which is when someone (usually a company director) gives a personal guarantee that they will step in and repay the loan personally if the business can’t. This personal guarantee can often give your score that final boost on the loan application form, but it does mean that person is personally liable if things go wrong.

So the benefits of going to a bank is that it’s tried and tested, you get to keep full control of your business, and as long as you can meet the payments and afford the interest then it’s a straight-forward business transaction. The bank may pretty much leave you alone to spend their money how you like as long as you keep making the payments. 

The downside is that no matter what happens, you have to pay that money back with a huge slice of interest on top. And if you gave a personal guarantee then your own personal assets, such as your home and personal savings, can all be targeted by the bank if the business defaults on the loan. You also have to start paying the loan back straight away – the first repayment will likely be due just a few weeks after you get the money. So if you have worked out a budget and cashflow then make sure you remember to include loan repayments coming out from month one.

"You'd be amazed how many business founders started their business with a loan from a parent or rich aunt, often at no interest and with very relaxed repayment terms."

3. Private loans and other finance

If you’re not generating the money to self fund and the bank says no because you don’t get the right score on your application, then there are still other places you can borrow money from. In fact, you’d be amazed how many business founders started their business with a loan from a parent or rich aunt, often at no interest and with very relaxed repayment terms.

This might be the the solution for you too, in fact some parents would rather that their children make use of their inheritance rather than waiting until they get awarded it through a will. And private loans from a friend or family member can come with lots of advantages – they are likely to be more flexible and not based just on your balance sheets from the last three years. It might be at a far lower interest rate than you’d get from a high-street lender, or some family or friends might not charge you interest at all. It might come with a payment holiday, so they agree that you start paying the money back once the business can afford to, rather than asking for repayments straight away.

So it’s a route to consider if your family has some money put away that they are not using or if you have close friends who have been successful, but it’s a conversation to always start lightly: you shouldn’t look to take advantage of someone just because they are close to you. Be honest about the situation and what you plan to do with the money. Share your business plan with them and make sure they understand any risks. 

Always look to get an agreement or contract drawn up, that details the amount being loaned and what the repayment terms are – especially if there are others involved in the business than yourself. But to be honest, using a loved-one’s money to build a business can mean you are more careful with that money than you would be if it came from a bank. I mean, you’re going to have to face your relatives over the table every holiday season, and if you lost tens of thousands of pounds of their money then that’s always going to make family social occasions a bit tense!

You might even decide to use your own personal money to fund your business. Now, I’ll emphasise that I’m not a financial advisor or accountant here so if you’re planning to do this then go get some professional advice, but if you own a property or have some kind of fund that you can release equity from, or even if you just have some savings stashed away, then you can lend that money to your business. There’s even some benefits to doing so, as you can charge interest on that loan meaning it’s another way to create income from that money rather than just having it sitting about. 

Of course, you’re obviously putting that money at risk and you may never get it back. But, when it is your own money on the line, you’re going to make sure that money is spent wisely and be a lot more careful about where it goes.


4. Finding Investors

The way that many people think of getting their business funded is through finding an investor. This is someone, or a group of people, who is going to financially support your business in exchange for part-ownership of that business. Because they will take part ownership of the business and they are looking at what your business could become with their investment, investors tend to be more willing to share the risks and rewards alongside you when growing a business, when perhaps a bank wouldn’t take that risk.

There are different types of investor, but the one you might be most familiar with as a small business is an angel investor – individuals who often invest both their money and their time into a business to help it grow in return for part ownership and a claim to future earnings. They often have a deal of business experience themselves and are usually looking for companies that align with their own personal interests or expertise. They know that their involvement will help the business grow, giving them a return on their investment.

Angel investors are usually different from Venture Capitalists, or VCs, who are another type of investor. A VC is usually investing purely to make money. They might even represent a professional investment firm or manage a fund instead of investing their own money, and as such they usually have a lot more money to invest but they will expect a lot more in terms of results back. And it might be that if you do go down the investor route that you start with an angel investor to help you grow and then look to use that growth to attract venture capitalists when you need bigger investments.


You always have to remember that any investor is looking for a return. And how much equity (or what share ownership of your business) that an investor will want might be based on many things, including your current turnover and company valuation and the likely amount of revenue your business might generate in the future. 

However, this money is an ‘investment’, it’s not money that an investor is guaranteed to get back. So that extra risk might mean an investor is looking for more ownership of the company in return than you were planning to offer. In some cases, an investor may even want a controlling majority meaning that they own more of the business than you do, so that if things do start to go wrong then they can step in and start making decisions to protect their investment. But if you do find the right investor then, in the best case scenario, you get the money you need and you might also get someone with a lot of experience to help and advise you too. But that’s also why finding investors is hard. They are out there, and there are even various vegan angel investors, but a lot of them don’t advertise themselves. Join an investor community and you will see why – there will be hundreds of posts from people, both with established businesses and new ideas for businesses, all looking for investors.

Most of the investors your business will encounter will come from a personal introduction or they will be someone you find through your own wider network. So that’s why you want to start finding and having these conversations a long time before you need the money. If you think that you might be looking for investment in 12 months’ time, then start trying to get those introductions and having those conversations now. It’s not like you see on the TV, you are not going to be pitching to a roomful of investors you’ve never met before, you’re likely to end up pitching your company to someone who you’ve got to know over a period of time and built a relationship with – so start doing that now.

You also need to understand what investors are looking for. Investors are not going to give you money to play with or just go and see if your idea works. Investors are usually looking to put their money into something (or someone) that has already proven it can make money. They want to invest in a business that has already proven itself so that they can help scale it up so it works bigger and better. So unless you’ve got this amazing track record of creating of creating hugely profitable businesses that you can point to, then usually an investor isn’t going to be interested until you’ve already proven that your business works, already has a trading history and is already generating money.

"Crowdfunding works, but there's a catch - and the clue is in the name. To be successful with crowdfunding you need to have a crowd."

5. Crowdfunding

The final route open to you is crowdfunding. And the great thing about crowdfunding is that it’s open to everyone. If you have a great idea, and you can find enough people who believe in that idea, then you can set up a crowdfunding campaign where people can put their money in collectively to make it happen. 

There’s two types of crowdfunding: equity crowdfunding, where everyone becomes a micro investor in your business; and rewards-based crowdfunding where someone gets a reward in return for their support, or they receive the product once it’s finished.

And it works. Especially in the vegan sector where your not just asking people to back a project or company, you’re asking them to back a cause too. We’ve seen our Vegan Business Tribe members raise everything from a few thousand pounds to launch a new product, through to hundreds of thousands of dollars to launch into a new country or territory. 

However, there is a catch to crowdfunding – and the clue is in the name. To be successful with crowdfunding you need to have a crowd. If you are a new start business without an audience, then you’re going to struggle to get a crowdfunder off the ground. Less than 25% of all crowdfunding campaigns hit their target and 10% don’t even get a single pledge. You are going to be responsible for every single person that lands on your campaign page, the online platforms like Kickstarter and Indiegogo aren’t going to drive people to your page for you. You need a strategy, you need a lot of energy, and you need to already have a large following that’s going to get behind you.

But crowdfunding campaigns can be amazing for your visibility, and it might be that you use an initial campaign, either equity or rewards-based, to give you the funds to get ready for a bigger fundraising project. You might use a crowdfunder to raise the money you need to hire the right expertise into the business to help you attract an investor for example.

But if you are thinking about crowdfunding, do your research. Go watch all our interviews with people who have done it successfully in our Vegan Business Academy. Find people who have succeeded in crowdfunding and ask them to show you how they did it and all the work it took them so you are going in with your eyes open. And allow yourself a run-up in order to get a good video made and to clear the space you’ll need to in your calendar to run the campaign. 


6. BONUS! Outside of the box funding Ideas

That’s most of the traditional ways that are open to you if you need to raise finance. You either build a business with the money it generates itself, you borrow that money, or you give away part of your ownership of your business in return for someone else putting money into it. Or if you’ve got a crowd, you might consider asking that crowd to back your mission.

But there are, sometimes, less conventional ways that I’ve seen businesses fund themselves too. And sometimes it’s worth doing some creative brainstorming around other ways you might be able to fund your business.

For instance, there are models like purchase order financing. This comes in to play when your business wins an order, but fulfilling that order might end up sinking your company at the same time! The amount of ingredients or components you’d have to buy to supply that order might cost more than you have in the bank, but the customer isn’t going to pay you until you deliver that product. So some lenders will lend you the money to fulfil that order on the back of a purchase order from a company. It will cost you a couple of percent, but it means you can pay your suppliers for the materials you need before you get paid by your customer. There are also other ‘working capital loans’ similar to this and it’s worth talking to an expert in lending and finance if you’re simply needing money to cover your working cashflow.


Another way to give your business extra cash is to renegotiate terms with your current suppliers. For example, if a supplier asks you to pay upfront for materials or services, once you’ve developed a relationship with them you might be able to negotiate better payment terms, or longer to pay. 

For example, if you pay your supplier on 15 days of them delivering their product or service to you, but your customer doesn’t pay you until 15 days after you’ve delivered your product or service to them, then that’s 30 days that you are having to fund. However, if you negotiated paying your supplier on 30 days, then you aren’t funding any of that yourself. You’ll get paid by your customer around the same time you are due to pay your supplier. In another example, if you have a regular supplier that you pay every month on 30 days, moving to paying them on 60 days instead gives your business a month’s revenue without the associated costs of sale.

There are also other alternatives to loans too. You might be able to find a grant or a competition aimed at start-ups or businesses in a certain sector or region. Or organisations like ProVeg run an incubator project for plant-based food businesses where they will help accelerate the growth of your business. You might be able to barter for services, for example if you’re a website company that needs some PR, can you find a PR company that needs a website?! You might also be able to actually sell your product before you make it, using money from pre-orders or deposits to fund the manufacturing.

Some businesses have even got really creative, for example selling the right for people to name their products or creating new products in partnership with a brand as a marketing exercise. I’ve even seen people sell virtual real-estate on computer generated worlds to raise money – and if you think that’s far fetched, you might remember the ‘Million Dollar Homepage’ back in the early 2000s, when a student sold pixels on his website for a dollar each, successfully raising a million dollars on the back of the dot com boom. More recently, companies have done similar projects with block-chain, selling unique virtual trading cards and NFTs to create revenue.

The next step...

So now that we know the different ways you can fund a business, it’s important to work out which are right for you and your business as well as which are going to be realistically available. 

Giving away equity and ownership in your business might be something you are not comfortable with (you want to keep all those future earnings for yourself!) but sometimes it’s better to own 50% of a much bigger pie than 100% of a business that never gets off the ground because it can’t get the funding.

But what’s more important is mindset. And I’ve had this proven to me over and again by vegan business owners: where there’s a will, there’s a way. And where there is a mission, there are others that will also believe in that mission. So if you’re not seeing any obvious routes to funding right now, start having conversations with people. Reach out to other business owners who have successfully raised money and funded their businesses, get introduced into their networks. The conversations you have today that might seem like a waste of time, may lead to the chance introduction that is crucial to you securing funding twelve months later. Almost everyone I’ve spoken to who raised finance for their business said they wish they’d started the journey, and having those conversations, earlier.

A bullet point recap of what we’ve covered in this article:

  1. Remember why you first started a vegan business in the first place. Keep connected to the cause, get to know other vegan entrepreneurs and business owners, and remember those 200 million land animals that lose their lives every day and your burning desire to do something about that.
  2. Identify and prioritise your key tasks: Separate out the tasks that will truly move your business forward and schedule the time in to make them happen. Consider creating an immovable deadline, such as committing to launch something at an event so that you have to hit the deadline regardless of whatever else happens!
  3. Create a conducive working environment: Your physical environment has a huge impact on your mental state. So make sure that your workspace is organised and free from distractions. Consider having a separate area for focused work if necessary, or buy a good pair of noise-cancelling headphones!
  4. Take control of your devices and notifications, don’t let them become a Tamagotchi trying to get your attention all day! Set focus times so they know not to distract you or use apps to block access to distracting websites.
  5. Effective time management will mean you get more done in the time you have. Do the important tasks first to avoid getting sidetracked. Batch similar tasks together, like scheduling meetings on specific days, to minimise disruption.
  6. Understand your natural peak productivity times. Take notice of when you feel most alert and focused and plan the tasks that need the most focus to match.
  7. Establish routines to signal to your brain that it’s time to focus. Maybe you’ll meditate for 20 minutes, or maybe you’ll walk around the block wearing a bowler hat like René Magritte!
  8. Overcome procrastination and perfectionism: Break down big time-swallowing tasks into smaller actions and complete them incrementally. And accept that things are going to constantly evolve and change in your business, so just get something to be good enough and then move on!

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