Membership standard
What funding is compatible with NOVC?
NOVC is anti-VC, not anti-capital.
We are bootstrappers, but we do not treat bootstrapping as a purity contest. Building a durable company can require savings, community support, credit, grants, outside expertise, and creative financing.
The NOVC line is not “founders must do everything alone.” The line is accepting institutional equity capital structured around venture-scale returns.
Compatible funding
| Funding source | Status | Standard |
|---|---|---|
| Founder funding | Encouraged | Founders may invest their own savings, assets, or earnings. |
| Employee investment | Encouraged | Employees may invest directly or participate through equity, option, or ownership programs. |
| Friends and family | Encouraged | Individuals may invest their own money, provided they are not acting on behalf of a VC or investment fund. |
| Customer revenue | Encouraged | Sales, subscriptions, service revenue, licenses, preorders, and customer-funded development are fully compatible. |
| Crowdfunding | Encouraged | Rewards, preorders, donations, and community equity crowdfunding are permitted. Equity campaigns must not include otherwise-ineligible VC, private-equity, or corporate venture investors. |
| Bank and credit-union loans | Encouraged | Ordinary business loans, credit facilities, equipment financing, and lines of credit are permitted. |
| SBA and government-backed loans | Encouraged | SBA loans and comparable public small-business lending programs are fully compatible. |
| Grants and prizes | Encouraged | Government, foundation, university, nonprofit, and commercial grants or prizes are permitted when they do not carry an equity claim or investor control. |
| Revenue-based financing | Permitted | Financing repaid as a share of revenue is compatible when it does not convert into equity or give the financier control over the company. |
| Individual angel investment | Permitted | An individual may invest their own money as an angel. They may not be investing on behalf of a fund, syndicate, corporate venture arm, or other institutional vehicle. |
| Accelerators and incubators | Conditional | Mentorship, workspace, services, grants, and fee-based programs are permitted. An accelerator investment is not permitted when the capital comes from a venture fund or requires institutional venture equity. |
Funding that is not compatible
A company must withdraw from NOVC before accepting:
- Investment from a venture capital firm or institutional venture fund.
- Investment from a corporate venture-capital arm.
- Private-equity, growth-equity, or similar institutional equity investment.
- Capital from a startup studio, accelerator fund, syndicate, or special-purpose vehicle acting as a venture investor.
- Funding routed through an individual or intermediary on behalf of an otherwise-ineligible investor.
- Financing that gives an institutional investor equity, a right to convert into equity, or meaningful control over the company.
- Any arrangement marketed under another name that functions substantially like venture-capital investment.
The instrument does not decide eligibility
A funding instrument is not automatically compatible or incompatible simply because it is called equity, debt, a SAFE, or a convertible note. NOVC considers:
- Who is providing the money.
- Whose capital they are investing.
- Whether they are acting individually or for an institution.
- Whether the agreement creates equity or conversion rights.
- Whether the financier receives control over company decisions.
- Whether the expected return depends on a venture-style acquisition or exit.
A SAFE funded by an individual angel investing personal money may be compatible. The same SAFE funded by a venture firm is not.
A conventional loan is generally compatible. A nominal “loan” that gives a venture fund equity, board control, or broad conversion rights is not.
Crowdfunding and community ownership
Crowdfunding is not a loophole; it is one of the funding models NOVC exists to celebrate. Members may raise money through product preorders, rewards-based campaigns, donation or patron-supported campaigns, community bonds or loans, regulation-compliant equity crowdfunding, and other broadly available community-funding models.
A crowdfunding campaign remains compatible as long as it does not serve as a vehicle for otherwise-ineligible venture, corporate venture, or private-equity investment.
Acquisitions and private equity
NOVC does not require founders to promise that they will never sell their company. However, a company can remain in the Alliance only while it continues to satisfy this standard.
An acquisition, recapitalization, or controlling investment by a VC firm, private-equity firm, corporate venture arm, or venture-backed holding company requires withdrawal.
An ordinary acquisition by another operating company does not automatically violate the pledge, but the resulting company may use the NOVC emblem only if it independently qualifies and formally renews the pledge.
Transparency over purity
Members are encouraged to describe their funding model in their registry profile — founder-funded, employee-owned, friends-and-family funded, customer-funded, crowdfunded, grant-funded, debt-financed, angel-funded, revenue-financed.
The purpose is not to rank one legitimate model above another. It is to help customers understand who financed the company and what incentives may shape its future.
Bootstrap with whatever helps you build. Just be honest about who is holding the bootstraps.
Withdrawal
The pledge holds for as long as the company is a member. A company that decides to take venture capital must withdraw from the Alliance first — and must say so plainly.
Before accepting venture capital, a member must:
- Stop displaying the NOVC emblem.
- Withdraw from the NOVC Alliance.
- Request removal from the active registry.
- Disclose the funding to customers by email or public post.
- Explicitly state in that communication that the company is withdrawing from the NOVC Alliance.
Withdrawal is an obligation, not a feature. Customers made decisions on the strength of the emblem, and they are owed a clear account when it stops applying. The disclosure requirement also prevents a company from quietly removing the emblem while avoiding accountability for its earlier pledge.
Former members are identified in the registry as Withdrawn, along with a link to their public disclosure.
Enforcement
NOVC relies on public commitments, member reporting, and credible reports from customers and the community. Companies that no longer qualify may have their emblem license revoked and their registry status updated.