Supplier Funding

Supplier Funding

July 16, 2020 by investor

Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

Another source of funding is supplier funding.

Supplier funding comes from those who provide services to your company such as contract manufacturing, software development, legal, accounting services, and more.

Suppliers provide their services in exchange not only for cash but also for equity. This reduces the amount of equity funding you need to raise from investors.

Contract manufacturers will invest in your business and in exchange they look for the startup to use their manufacturing services. 

Software development firms invest in startups by taking a portion of their software development fee in the form of equity. 

There are other examples, including lawyers and accountants who provide services in return for equity.

This aligns their interest with your interest as the business must succeed for the equity to be worth something. 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.