Your SaaS company runs on recurring revenue. To keep growing, you need a steady stream of capital to match. This is where SaaS funding comes in. Capital solutions designed for companies just like yours.
But what’s the right option for you? The answer depends on your growth stage, your business model, and how much control you want to keep.
This guide breaks down the typical growth journey for a SaaS company and shows you the right funding options available at each step. We’ll cover everything from early-stage investors to smart alternatives that help you grow without giving away precious equity.
Most SaaS companies move through three key phases. Each phase unlocks different types of capital. Understanding where you are helps you find the right funding partner.
This is the build-and-test phase. You’re deep in research and development, possibly with a beta version for early adopters. At this point, you have little to no revenue.
Funding is all about belief in your vision. Your first checks will likely come from:
Securing early backing builds credibility by showing future investors that someone else believes in your plan.
Your product is live, and you’re starting to see revenue trickle in. Your main job is to acquire customers and prove your business model works. This stage is often the most expensive, as you spend heavily on sales and marketing to build a user base.
At this point, you may qualify for a Seed round. To attract institutional investors, you need to show consistent growth in your Monthly Recurring Revenue (MRR) or Annual Recurring Revenue (ARR).
You have an established user base and a predictable revenue stream. Now, it's time to hit the accelerator. This could mean expanding into new markets, building out your team, or adding new features.
With proven value and a strong customer base, you can access more structured growth rounds, like a Series A or Series B and beyond. You also unlock new SaaS funding options, including private equity, venture debt, and other specialized growth funds.
As a founder, your funding choices fall into two main buckets: giving up equity or taking on debt. Let’s look at the most common options.
When you raise money from Angel investors or VCs, you sell them a percentage of your company. This is a powerful way to get large cash injections and expert guidance. However, it also dilutes your ownership and control.
VCs expect high returns and will have a say in major business decisions. This path is ideal for companies aiming for massive, rapid growth.
How Can I Fund a SaaS Company Without VC?
Not every founder wants to go the VC route. If you want to protect your equity, you can turn to less dilutive financing. These options let you borrow capital for growth and pay it back over time, keeping your ownership intact.
Here are three strong alternatives for SaaS founders:
Venture debt is a type of loan designed for growth-stage companies. It’s less expensive than equity and more flexible than a traditional bank loan. You can use it alongside an equity round to raise more capital or as a standalone flexible financing tool.
While many lenders only offer venture debt to VC-backed companies, some firms provide venture debt for bootstrapped companies, giving more founders access to growth capital.
Revenue-based financing can also be a fit for SaaS businesses given it’s tied directly to your monthly recurring revenue.
An RBF provider gives you a cash advance, and you pay it back with a percentage of your future monthly revenue (also known as revenue sharing). Payments go up when sales are strong and down when they’re slow. RBF lenders love the predictable nature of SaaS recurring revenue, making it easier for you to qualify if you have solid MRR and a clear growth path.
Depending on your jurisdiction and nature of business, government funding programs, such as grants or subsidies may be available. Generally these programs do not require you to give up equity but often come with bespoke eligibility and reporting requirements.
For example, in Canada, your SaaS company may qualify for government R&D tax credits through programs like the Scientific Research and Experimental Development (SR&ED) initiative.
1. Can I combine equity, venture debt, and non-dilutive options?
Absolutely. Many growth-stage SaaS firms raise equity, then layer in venture debt and or non-dilutive options to scale once achieving product-market fit. A blended strategy helps preserve ownership while increasing total capital useful for hiring, entering new markets, extending runway, or achieving cash breakeven.
2. When is the right time to seek venture debt?
The ideal time to consider venture debt is when you have a clear plan for growth and can show how the capital will generate a return. This is typically after you’ve found product-market fit and have a predictable revenue engine (generally +$2M in ARR). It’s perfect for scaling your sales team, increasing marketing spend, or bridging the gap to your next funding round without giving up more equity at a lower valuation.
3. Can bootstrapped SaaS companies really get funding?
Yes. While VC funding can be difficult and time consuming for bootstrapped companies to secure, alternative financing could be a good option for your business. Lenders focus on your business fundamentals—like MRR, growth rate, and customer retention, and not whether you have VC backing. Options like venture debt and revenue-based financing are built for profitable, steady-growth businesses that want to scale on their own terms.
