Fundraising for your Estonian company

Raising money can be an important part of growing a business, but fundraising can also seem complicated if you have never done it before. The process can involve different types of funding, application or investment processes, financial information, negotiations, and requirements that vary depending on who is providing the funding.

There is no single way to raise money for your company. You might apply for a grant, take out a business loan, seek investment from an angel investor or venture capital fund, or use another form of financing. Each option has its own process, requirements, costs, and expectations.

In this article, we explain how fundraising works, what to expect at different stages, how long the process can take, and how to prepare. We also look at fundraising as an Estonian company and where you can find funding opportunities.

What is fundraising?

Fundraising is the process of finding and securing money to support your business. Companies may raise funding to start or develop their business, launch a new product, hire employees, enter new markets, purchase equipment, or finance other business activities.

Funding can come from different sources. You might receive a grant, borrow money from a bank or other lender, or raise investment from individuals or investment funds. Some forms of funding need to be repaid, while others may involve giving investors a share of your company.

The amount and type of funding you need will depend on your business, its stage of development, and what you want to finance. A small business may need funding for equipment or working capital, while a growing startup may seek investment to develop its product and expand into new markets.

Fundraising is not limited to startups or high-growth companies. Businesses of different sizes and types can use different forms of external funding depending on their needs and eligibility.

Types of funding

There are several ways to finance your business. The right option depends on what you need the money for, how much you need, your business model, and the requirements you can meet.

Grants are funds provided by public organisations, foundations, or other organisations for a specific purpose or project. Grants generally do not need to be repaid, but they can come with eligibility criteria, application processes, reporting requirements, and conditions on how the money can be used.

Loans allow you to borrow money from a bank or another lender and repay it over an agreed period, usually with interest. Lenders may assess factors such as your company's financial situation, business plan, revenue, assets, and ability to repay the loan.

Angel investment involves individuals investing their own money in a company. In return, an angel investor may receive an ownership share or another form of financial interest in the company. Angel investors may also bring industry experience, networks, or other resources.

Venture capital is investment provided by specialised investment funds, usually in exchange for equity. Venture capital funds typically invest in companies with significant growth potential and may focus on particular industries, stages, or markets.

Crowdfunding involves raising money from a larger number of people, usually through an online platform. Depending on the model, people may contribute in exchange for equity, a product or reward, or another form of return.

Other forms of financing are also available, including different types of private investment, public financing, and alternative forms of business finance. The availability and suitability of each option depends on your company and the specific funding provider.

How the fundraising process works

The fundraising process depends on the type of funding you are seeking and the organisation providing it. Applying for a grant, taking out a business loan, and raising investment can involve very different steps. However, most fundraising processes involve some form of preparation, application or discussion, evaluation, and decision-making.

A typical fundraising process may look like this:

1. Identify your funding needs
   Define how much funding you need, what you want to use it for, and when you need it.
2. Explore funding options
   Look for grants, loans, investors, or other forms of financing that match your business and funding needs.
3. Check eligibility and requirements
   Review the criteria, conditions, application process, and documentation required by the funding provider.
4. Prepare your application or materials
   Depending on the funding type, you may need financial information, a business plan, forecasts, a pitch deck, supporting documents, or other information about your company.
5. Apply or approach the funding provider
   Submit your application, contact potential investors, or apply through the relevant financing channel.
6. Evaluation and discussions
   The funding provider reviews your application or company. This may involve additional questions, meetings, interviews, financial assessments, or due diligence.
7. Decision and agreement
   If your application or proposal is accepted, you may need to agree on the terms of the funding and sign an agreement.
8. Receive and use the funding
   The funding is provided according to the agreed conditions. Depending on the type of funding, you may also have reporting, repayment, or other ongoing requirements.

The process is not always linear. You may need to provide additional information, revise an application, speak with several potential investors, or apply more than once before securing funding. The steps and requirements can also vary significantly between funding providers.

How long does fundraising take?

There is no standard timeline for raising funding. The process can take anywhere from a few weeks to several months or longer, depending on the type of funding, the provider, the amount involved, and how complex the application or investment process is.

For example, a grant may have a fixed application period followed by an evaluation process. A loan application may depend on how quickly the lender can assess your company's finances and supporting documents. Raising investment can take longer because it may involve several meetings with investors, negotiations, and due diligence.

The time you need to prepare can also be significant. You may need to collect financial information, prepare forecasts, develop a business plan or pitch materials, gather supporting documents, and identify suitable funding opportunities before submitting an application or approaching investors.

If you need funding for a specific business activity or deadline, take the full process into account rather than only the time needed to submit an application. Funding decisions may take longer than expected, and some programmes only accept applications during specific periods.

How competitive is funding?

Funding can be competitive, particularly when a programme has a limited budget or an investor receives more opportunities than they can fund. However, there is no single success or approval rate that applies to all types of funding. Competition varies between funding providers, programmes, industries, business stages, and markets.

For grants, the number of applications and available budget can affect how competitive a particular call is. Meeting the eligibility requirements does not necessarily mean that your application will receive funding. Applications may be evaluated against specific criteria, and funding may be awarded to a limited number of applicants.

Investment works differently. Investors typically consider whether a company fits their investment strategy, including factors such as its sector, stage, market, business model, growth potential, and the amount of investment being sought. A company can therefore be a good fit for one investor but not for another.

Loans are also assessed differently. Lenders may consider factors such as your company's financial position, revenue, credit history, assets, business plan, and ability to repay the loan. Meeting a lender's basic requirements does not necessarily mean that a loan will be approved.

If a funding opportunity publishes statistics about previous applications, these can help you understand the level of competition for that specific programme. However, past application numbers or success rates do not guarantee the outcome of a future application.

Preparing for fundraising

Before you start looking for funding, it can help to have a clear picture of your business and what you need the funding for. The information you need will depend on the type of funding, but some preparation is relevant across different funding options.

Consider having the following ready:

• A clear funding goal: Know how much funding you are looking for and what you plan to use it for.
• An overview of your business: Be able to explain what you do, who your customers are, how your business makes money, and where it is heading.
• Financial information: Keep your financial records, budgets, forecasts, and other relevant financial information up to date.
• Relevant company documents: Make sure important company and business documents are organised and available when needed.
• Evidence of progress: Depending on your business and the type of funding, this could include customers, revenue, partnerships, product development, or other indicators of progress.
• A list of potential funding sources: Research funding options that match your business, stage, sector, and needs.

You do not need to prepare the same materials for every type of funding. Start with the requirements of the specific grant, lender, investor, or other funding provider you are considering.

Fundraising as an Estonian company

Your Estonian company can look for funding in Estonia or abroad. You are not limited to Estonian funding providers simply because your company is registered in Estonia. The options available to you depend on your business, what you want to finance, where your business operates, and the requirements of the funding provider.

Estonia has an active startup and venture capital ecosystem, although investment levels can change from year to year. In the first half of 2025, Estonian startups raised €174.8 million across 32 investment deals, compared with €242.6 million across 39 deals in the first half of 2024. Investment was concentrated among younger companies: businesses less than five years old received €141.9 million, or 81% of total funding, while deep tech companies attracted €88.3 million, or 51% of total funding. These figures describe investment in the Estonian startup sector and do not represent a general approval or success rate for companies seeking funding.

If you are looking for funding in Estonia, you can explore grants and public funding programmes, bank and other business loans, angel investors, venture capital funds, crowdfunding, and other forms of business finance. Some programmes may also be available through the European Union or other international organisations.

You can also search for funding outside Estonia. International investors, banks, grant programmes, EU funding schemes, and other financing providers may consider Estonian companies, depending on their eligibility requirements. For example, an investor may focus on a particular sector or stage rather than the country where your company is registered. Always check whether a funding opportunity requires your company, founders, employees, project, or business activity to be located in a particular country or region.

Being registered in Estonia does not automatically make your company eligible for funding and e-Residency does not always guarantee that your application will be accepted. Funding providers may have their own requirements concerning your company, founders, business activities, location, sector, financial situation, or use of the funding.

Where to find funding opportunities

Our Business support and funding in Estonia article brings together examples of funding programmes, support organisations, incubators, accelerators, and other resources available to businesses connected to Estonia.

You can also explore:

• Fund your business for information about different funding options and resources.
• Estonia Innovation Ecosystem to explore companies, investors, and other organisations in Estonia's startup ecosystem.
• EU funding and grants for funding programmes available at European level.
• Funding providers in other countries if your business operates in, sells to, or has other relevant connections with those markets.

When you find a funding opportunity, check its eligibility criteria and conditions carefully. An opportunity that is available to an Estonian company may still have requirements about where the funded activities take place or who can receive the funding.

The funding opportunities and resources mentioned in this article are examples and do not represent a complete list of all funding available to businesses in Estonia or internationally.