They can be elusive, but legitimate sources do exist.

North Dakota may not be the first place that comes to mind for a start-up that sells high-end bags and accessories, but for Scott Gabrielson, founder of Oliver Cabell, it’s proven to be the perfect launching point. That location has been key to securing the financing he needed, including a $50,000 microloan. Even better, he was able to get $32,500 in grants–money that does not need to be repaid.

Small business grants can be elusive, and the lure of free money has been exploited by scammers who pocket fees from would-be entrepreneurs. But legitimate grant sources do exist, and Gabrielson’s persistence and creativity in seeking funding sources helped him land one.

Originally from North Dakota, Gabrielson took a circuitous route back to his home state. He had worked in Minneapolis in investment banking, followed by a stint at a non-profit. Returning to school to pursue a Master’s degree at the University of Oxford, he says he spent a great deal of time investigating the fashion business, especially high end luxury goods. On a factory tour in Asia, he witnessed traditional European brands–ones that claimed to be made in Italy or Europe–being manufactured.

It was an “aha” moment for him. He realized that high-end bags often cost less than $100 to produce, but were being sold for over $1200. “There was a big discrepancy between quality and brand,” he says. He decided he wanted to find out whether he could sell similar high quality goods to customers at a fraction of the cost, and his company, Oliver Cabell, was born.

But he faced a major hurdle: securing financing for his startup.

The banks he met with were supportive, he says, but were reluctant to lend for an online retail startup with no collateral. Venture capitalists wanted to see traction first, and he knew he’d have to give up a significant amount of equity if he went that route.

He asked himself, “What other sources of funds are out there?”

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