What funding option is NOT commonly used by startups to finance their initial operations?

The choice of nonprofit grants as a funding option that is not commonly used by startups for financing their initial operations is accurate due to the specific nature and purpose of these grants. Nonprofit grants are typically awarded to organizations that aim to advance a charitable mission rather than to profit-driven businesses. Startups, which are generally focused on creating profit and growth rather than fulfilling nonprofit missions, do not usually qualify for these grants.

In contrast, funding options like angel investors, crowdfunding, and traditional bank loans are specifically tailored to support startups. Angel investors provide equity financing in exchange for ownership stakes, often taking on a more hands-on role in the business's development. Crowdfunding allows startups to raise capital from a large number of individuals, attracting funds by showcasing their ideas on platforms that appeal to everyday investors. Traditional bank loans, while more challenging to secure for startups without an established credit history, are a common method for businesses to gain the necessary capital for operations.

Thus, nonprofit grants simply do not align with the funding needs and structures of most startups, making this option less relevant in the context of their initial financing needs.