All too often, entrepreneurs are overly concerned about trying to close the best deal where they can get the most cash and give away as little equity as possible.

Instead, they should be looking for investors and partners who can provide more than just financial resources to actually help the business succeed.

Paul Graham sums it up perfectly in ‘How to Start a Startup‘:

Financially, a startup is like a pass/fail course. The way to get rich from a startup is to maximize the company’s chances of succeeding, not to maximize the amount of stock you retain. So if you can trade stock for something that improves your odds, it’s probably a smart move.

Getting a suitable investor is one of the most significant decisions for any startup, especially in the initial stages. It could literally make or break the company, so take your time to do your research, talk to as many potential investors as possible and think strategically when choosing which offer to accept.

CNNMoney reports that “At SXSW, investors and founders hunt for million-dollar hookups”, so it’s a fertile environment to meet real investors and get feedback from experienced Venture Capital firms about the prospects for your company’s business.

There are opportunities to meet potential investors in wide range of events. The meetups that are more focused on investments, venture capital and startup financing are a natural start, but there are also ‘Pitch Fests’ in most of the major conferences as well, where entrepreneurs have a chance of pitching their companies to a panel of potential investors.

So, get yourself out there and talk to as many people as possible. Although you may not actually close any confirmed investment on the day, you’ll probably make a lot of great contacts that may end up introducing you to your end-investors.

Getting financing for a small new business from banks and professional investors can be very difficult or almost impossible, so entrepreneurs normally have to rely on people they know or their own savings and assets to fund their new ventures.

The question of how to raise this initial seed financing will depend on your personal financial circumstances and your outlook when it comes to money.

Some entrepreneurs believe in using other people’s money before putting their own hard earned cash at risk, while others would prefer to use their own resources instead of asking friends and family for help. On balance, the best solution may be to use a mix of both your own funds together with loans or investments from people who know you.

Here are 10 common funding options that startup companies use to finance their new businesses:

PERSONAL MONEY

1. Savings - Founders can use savings from fixed deposits, Certificates of Deposits and other cash equivalents to finance the business.

2. Investments - Founders can also sell any assets such as stocks, bonds and other investments to raise cash to fund the startup.

3. Home Loan- If necessary, founders can use their homes as security to get a mortgage or home equity loan from banks and other lenders.

4. Credit Cards - A common startup financing source are credit cards. Founders can take cash advances and pay for company expenses from personal credit cards.

5. Personal Loans – Another source of cash for founders is to get other forms of secured or unsecured personal loans which may be available depending on your credit rating.

PEOPLE WHO KNOW YOU

6. Family – Apart from your own money, family members are normally the first port of call when it comes to getting loans or investments for your startup business.

7. Friends – In some cases, friends may be the first option, but either way, friends and family are the best candidates for believing in you and your business.

PARTIES RELATED TO THE COMPANY

8. Employees – For some startups, certain employees or members of the management may receive reduced compensation or have salaries owed to them during the pre-funding phase.

9. Suppliers – In other situations, some businesses may be able to get long term credit for inventory from suppliers or extended payment terms from vendors and service providers.

10. Customers- Deposits and pre-payments from customers can also serve as a startup financing option for certain types of companies.

Entrepreneurs can narrow down the viable ways of getting money to fund a new venture by understanding their business and the type of financiers who may be interested in providing capital to them.

For example, the financing alternatives for a new restaurant business will be very different to the funding of a hot tech startup. So, do your research and don’t waste time knocking on the wrong doors.

In general, there are a few ways to raise capital for a startup – equity financing, debt financing and business grants.

EQUITY

With equity financing, the people who provide capital will be investors who want to take a stake in the startup in order to have ownership and a share of future earnings.

The returns for equity investors will come in the form of a capital gain when selling the shares owned for a higher price and from any dividends that the company decides to pay when generating profits.

DEBT

In contrast, debt financing from bank loans and other debentures do not affect a company’s shareholding structure. Instead, borrowers have to make interest payments to compensate the lender for provding the loan.

The interest rate charged by loan lenders will depend on market rates, the company’s nature of business and the risk of default in paying the interest as agreed or the repayment of the principal amount lent.

GRANTS

The other potential source of capital is from government grants for startup businesses. Depending on where you live and the type of business you intend to pursue, there may be a number of state and federal grants to help small startups which are applicable to your venture.

Needless to say, if there’s a grant available and you can get it, then it’s the most attractive financing option for any startup company. With a grant, no equity needs to be given away, no interest needs to be paid and in many cases, the principal doesn’t have to be repaid.

It’s almost like free money and any startup should consider it before exploring other options, or at least, it should be investigated in parallel with debt or equity alternatives.