Where to Get SaaS Funding: Exploring Four Options

Growth-stage SaaS companies have several options for funding sources. Each has its benefits — but also distinct advantages that can impact progress and results.

where to get saas funding

As a SaaS founder or leader, you have a vision for your company — one that you’ve been working hard to make a reality. Some of these funding sources will work well toward that goal, whereas others could derail or slow you down. If you’ve been wondering where to get SaaS funding, it’s important that you fully understand these pros and cons so you can make the best, most informed decision for your business. 


Most SaaS companies self-fund their way to a certain point while they build their product, ensure product-market fit, build their user base, and prove viability. While any SaaS company could continue to grow organically beyond that point, self-funding doesn’t always accelerate growth plans.


  • All growth is organic, meaning you use your own profit to scale up
  • You stay in control at all times vs. working with a third party
  • There are no external financial mechanisms in play (i.e. less risk)
  • You don’t have to make dividend or monthly loan payments
  • The financial outcome is entirely yours to decide


  • Capital needed for acceleration is tied to your current rate of growth
  • Reaching and accelerating through the next stage of growth takes time
  • Additional investment for new tech or hires isn’t always available
  • You’re responsible for the financial impact of your decisions
  • The time horizon on your long-term goal (exit, acquisition) is greater

Bank Loans

Bank loans are less common than partnerships with venture capital firms and angel investors, but SaaS companies do utilize them. While a larger amount of upfront capital is great, there are some important aspects to consider first.


  • You’ll have a strong source of capital to use for growth needs
  • You’ll build a relationship with an established financial institution
  • Your capital is a loan, so it has a definitive end point
  • Your partner may be involved in helping to guide your decisions
  • There may be certain tax advantages associated with the loan (but you should definitely check with your own tax advisor before proceeding)


  • Your capital is a loan requiring set repayment parameters
  • Interest rates are currently high, so the cost of capital is higher
  • A personal guarantee is typically required
  • You’ll need to have strong collateral options to qualify for the loan
  • There may be stipulations on what the capital can be used for
  • The banking partner may require a seat on your board
  • Repayment on the loan may impact your long-term financial outcome

Venture Capital and Angel Investors

Venture capital and angel investors are some of the most common choices for SaaS companies, typically due to the experience, partnership, and connections they offer for SaaS leaders.


  • The amount of capital you receive is greater, allowing you to do more sooner
  • You’ll gain an experienced partner or team to advise and support you
  • These investors focus on specific industries and will have past successes
  • You can use the capital for a variety of growth and operational needs
  • Equity funding can help you cement the foundation of your business
  • You’ll gain access to a variety of valuable, helpful industry contacts


  • You’ll be required to give up a stake in your business for the investment
  • As a result, your share value may decline due to creating more shares
  • Obtaining equity funding can take months to even a year or more
  • The cost of obtaining equity is higher due to more legal reviews
  • You’ll have to consider your partner’s voice when making decisions
  • You’ll need to make dividend payments as long as the partner is invested
  • The partner can essentially stay invested as long as they want
  • You’ll lose some control over the direction of your business

Venture Debt



  • The interest rate on this debt type is typically higher
  • Depending on your loan, payments may increase alongside profitability
  • Because it’s a loan, you’ll pay more over the life of the loan
  • You may need to refinance the loan if you use an interest-only structure
  • You may be required to uphold a covenant in order to qualify

Go with the Option That Many SaaS Companies Say Is the Most Helpful

When you’re exploring where to get SaaS funding, consider using a solution whose benefits outweigh the downsides. As outlined here, venture debt financing provides a wealth of flexibility and customization that isn’t available with other sources so you can maximize your results and achieve your financial goals sooner. At River SaaS Capital, we’ve been helping SaaS companies nationwide leverage the momentum they’ve already built with our growth capital.

In our annual reports, SaaS companies consistently cite venture debt financing as one of the most helpful solutions they’ve used or plan to use. Often, venture debt is used alongside other sources thanks to its complementary nature. It can be used as a bridge between raise rounds, to extend a cash runway, and more — on top of its numerous uses for marketing and sales.

If you’re ready to learn more, fill out the form below to connect with our investment team. We look forward to working with you!