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As I learn, fundraising is always a nightmare. It drains a considerable amount of energy. No matter how promising the pitch you make, it's not sure to entice an Angel or a VC. Even if they agree, it is quite hard to make them sign a check (cheque)

Entrepreneurship is all about finding opportunities and being creative, about taking the unbeaten path(s) and making the things happen. How does the idea of raising money through unconventional means sound to you? A few of such channels/sources I think of are as follows:

  1. Organizing events such as concerts of well known artists (also, get sponsors )
  2. Exhibition cum sale of artwork
  3. Any others that you can think of

The exhibitions, concerts could even be capitalized to promote your startup. During such events, in addition to promoting their business, the sponsors too, get an opportunity to sell their goods/services thereby landing up in a win-win situation for both (the sponsors as well as the entrepreneur)

I have a feeling that these (and other such) ways would be comparatively easier. Agree, it diverts your attention towards non-core things, but what the heck? At the end of the day, it's money that matters for a start-up.

I'm eager to know the pros and cons.

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I've just started trying out Peerbackers.com. Similar to Kickstarter, but they just launched last week. (My venture is here: http://bitly.com/peerbacker). I can let you know how it goes...

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Sandeep kickstarter.com offers a very unconventional but highly successful way of rasing money. Give it a try

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hmmm...looks good. But alas! It will take time to spread out of US. – Sandeep Satavlekar Oct 21 '10 at 16:37
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Jill, you could use your online presence to generate some (mostly) passive income.

My first startup was an adult game company and to pay the servers I began running some affiliate ads on the site. I didn't expect much to come of it but figured we had a lot of press and traffic coming to look for these types of games but ours was not ready so why not sell someone else's and get a commission while we work? Well, cut to today: I never did get our game funded and eventually moved on to other projects, but I still get affiliate income from those exact same ads/links I put up over 4 years ago.

If you can find a few quality affiliate offers that match well with your company website's traffic, it might work for you (though obviously it works better in adult since the commissions are all 50% revshare + rebills). Aside from affiliate programs, you could also put in the standard Google Ads, etc. but don't expect much from that unless you have huge traffic.

Conferences an also be very lucrative. If you can organize a good conference in your niche and get well-known speakers, there is often a nice pay day with only a limited commitment of time (from start to finish, you can ramp up in about 4-6 months if you already have many contacts and funds to reserve your location and place ads. Get a good PR person involved and tackle a niche where people have money and real problems/confusion about something important (health, money, new trends/tech in business that people want but don't yet know enough about). As with anything like this though, you are essentially starting a new business to fund another business (not always the best plan, but can be a creative way to turn a nice profit in a relatively short timeframe). Carries risk if you can't sell seats or get top speakers though (don't reserve space until you have all your keynotes and major speakers committed).

Good luck!

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