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Five Funding Sources for Startup: Customers
Early Adopters, Licensing, Future, Strategic Partners, Crowd
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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The Crumbling of Corporate Culture
Teaching Startup: The Show - Episode 1.4
I founded Teaching Startup because I believe we're on the verge of a new era of entrepreneurship.
Those jobs we lost in the Great Recession? They're not coming back. They're being automated and streamlined out of existence. Then you've got all these kids coming out of higher education, hundreds of thousands of dollars in debt in some cases, who can't find a job worth their degree.
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How to Start a Company Outside of Silicon Valley
The Startup Show - Episode 6.4
In Episode 6.4 of The Startup Show, Joe Procopio (Automated Insights, ExitEvent), Jon Colgan (Veeto, Cellbreaker), and Andy Roth (RocketBolt) are kind of done with all the thinkpieces coming down from on high that plead with every startup ecosystem that isn't Silicon Valley to stop trying to be like Silicon Valley. Trust us. We're not. But we do need to focus on all the ways in which we're different and how to play to our strengths.
Look. We get it. West coast investors don't invest in places outside of Silicon Valley because there's so much money and opportunity falling out of pockets on Sand Hill Road. See Episode 5.1: Why West Coast VCs Won't Fund Your Business.
The thing about startup is that it doesn't work well unless there's a community built around it. Techstars' Brad Feld likes to say that building a startup community is a 20-year proposition that needs to be led by the entrepreneurs.
But can that 20-year window shortened if we start leaning on technology, like video conferencing, teleworking, and freelance marketplaces? Shouldn't we be able to connect and bring the physical hubs closer together with digital hubs (like with, say, Teaching Startup)?
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Tatiana Battles the Big Boys
The Startup Show: Episode 6.6
In Episode 6.6 of The Startup Show, Joe Procopio (Automated Insights, ExitEvent), Jon Colgan (Veeto, Cellbreaker), and Andy Roth (RocketBolt) discuss the challenges of starting up a retail product, in this case, Mati Energy, with founder and CEO Tatiana Birgisson. The beverage industry is home to some entrenched, deep-pocketed (sometimes evil) corporations, and the plucky startup has to be more than just unique and hardworking to survive in that environment.
There's almost always an element of luck involved.
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