Most US startups are funded by entrepreneurs from their own pockets and they are not dependent on banks or venture capital (VC) firms, new Federal Reserve data shows.
Federal Reserve Governor Elizabeth Duke said in a recent speech citing preliminary results from the 2010 Survey of Consumer Finances, a report based on interviews with some 6,500 US consumers, that more than 70% of the nation’s startups use personal savings or assets as a primary source of funding.
Just 6% relied on personal loans, while 3% took out business loans or used unutilised credit card credit, the survey found. An even smaller percentage turned to credit unions or investors.
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