A quick guide to startup funding models in Spain

Starting a startup is an exciting but challenging adventure, and one of the biggest challenges faced by entrepreneurs is the search for adequate funding. In Spain, the options are varied and are adapted to different stages and needs. Below, we explore some of the main ways to raise capital, including examples of companies that have succeeded thanks to these strategies. 

1. Bootstrapping: the basis of all entrepreneurship

Bootstrapping involves starting your business with your own resources, without outside help. It’s a tough but rewarding path, as you maintain total control. Hawkers, the well-known sunglasses brand, began with an initial investment of just 300 euros from the founders, demonstrating that with creativity and intelligent management, bootstrapping can be a great starting point.

2. Grants and grants: institutional impetus

In Spain, government and EU support offers a financial boost to innovative startups. Wallbox, specializing in charging solutions for electric vehicles, is a company profile that can qualify for initial support through grants to develop its technology and position itself as a market leader.

3. Business Angels: more than money

Investors not only provide capital, but also experience and a valuable network of contacts. Glovo, the home delivery app, is a notable example. In the beginning, it received the support of several business angels, which was crucial for its expansion and subsequent success.

4. Venture capital: for ventures with great potential

Venture capital firms are critical for startups looking to scale quickly. Cabify, the transportation platform, is a clear example of success in this category, having attracted the attention of renowned investors such as Rakuten Ventures or Endeavor.

5. Crowdfunding: community funding

Crowdfunding is a funding strategy that allows numerous investors to contribute smaller amounts, thus democratizing support for new companies. This approach not only raises funds, but it also builds a community of engaged supporters from the start.
An example of a successful startup that used crowdfunding to finance its project is Oculus. This virtual reality company launched a Kickstarter campaign with an initial goal of $250,000 and managed to raise $2.4 M in a short time. This was before Meta acquired the company for $2,000 million in 2014.

In Spain, Heura, known for its vegan chicken alternative, received 16M€ in funding. The funds are earmarked for the development of vegan pork and its global expansion. This investment followed a crowdfunding campaign that raised €4M in just 24 hours.

These companies demonstrate the diversity and potential of the startup ecosystem in Spain, as well as the viability of crowdfunding as a funding method in different sectors.

6. Loans and lines of credit: the banking classic

Although more traditional, bank loans are a viable option. Early-stage lines of credit serve to manage cash flow as your user base grows.

7. Incubators and accelerators: a springboard for startups

These programs offer not only funding, but also mentoring and resources. Eatable Adventures, an accelerator for food startups, has boosted many emerging companies in the sector.

Every funding method has its advantages and challenges, and what works for one company may not be right for another. It’s vital that entrepreneurs evaluate their specific needs, long-term objectives and cultural fit with their potential investors before embarking on one of these routes. With the right strategy, funding doesn’t have to be an obstacle to the success of your startup in Spain.

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