how does startup funding work?

Startup funding is essentially money given to help a new business get started. Think of it like a loan from friends or family: the startup owners borrow the money, and in exchange, the funders get to own a part of the company. The owners usually pay the funders back over time (with interest) or when the company is sold. To start a company, startup owners usually try to find investors such as venture capitalists (people who invest in riskier businesses) or angel investors (wealthy individuals who invest their own money). After pitching their idea to potential investors, the owners might get funding in exchange for giving the investors a certain number of shares in the company. This means that the investors are part owners and get to share in any profits the company makes.