Five Funding Sources for Startup: Customers

Early Adopters, Licensing, Future, Strategic Partners, Crowd
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OK, let's talk about money.

No matter the reasons you embarked on your startup journey, you're going to need fuel for the engine. Ideas, talent, and technology are crucial, but if they don't lead to cash, you'll be wasting them.

It's money. Money is the fuel.

When I talk about funding, I'm going to ignore your intentions as a founder -- in that, I mean I don't care how noble and altruistic your reasons are for doing what you do. Startup street is littered with the burned out carcasses of enterprises whose founders had the best of intentions, but couldn't or wouldn't focus on making their mission sustainable.

Don't let that be you. You need to be funded.

Funding is the most complex part of startup. How, when, and why you get funded is an individual series of choices, and every startup will take a different path. No one strategy is better than another, but you should definitely have a strategy in place before you raise a dime.

Customers are your primary source of funds. I can't state this emphatically enough so I'll just repeat it a number of different ways.

I'm not leading off this series on funding with venture capital or angel investing or friends and family money or even self-funding. While all of those are certainly valid and important, and I'll get to all of them, the value brought by money from all of those sources is completely eclipsed by the value brought by money from customers.

In fact, you can start your company without ever raising money from any of those four other sources. You can't survive without revenue, and you should be in this mindset from the very beginning.

There. I think I beat that to death, and we can move on.


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