Which Funding Option Is Right for You?

Among these various funding options, which are the best for you and your new business? To find out, you have to get down to work and do some comparisons.

If you have relatively modest goals and funding needs (as most eBay businesses do), you're not large enough to show up on the radar of the big venture capital firms. This is probably for the best, because it's unlikely you'd want the hassle (and control issues) associated with venture capital funding.

Equity placement with small investors is also out of the question for most eBay businesses. Again, this is probably for the best, as you have all sorts of legal issues, not the least of which is developing a dividend-based or profit-sharing payout for your partners.

A more popular source of funding for eBay sellers is your friendly neighborhood banker. It's much easier to get a bank loan than to solicit investments. Borrow enough money to get up and running, make sure you pay it back in time, and then you're free of all obligations.

Even more popular is the self-funding option. If you start modestly (and you should), you probably have enough cash in the bank (or a high enough credit card limit) to handle your minimal startup costs. Just make sure that the costs of launching your business don't keep you from paying your rent or mortgage, and you should be able to pay yourself back in short order.