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Five Funding Sources for Startup: Self
Out of Pocket, Day Job, Consulting, Co-Founders, Loans
getting money from your customers as your first, earliest, and preferably sole source of funding for your startup.
Now let's talk reality.
I'm kidding. But we're all aware of the fact that starting a company costs money, and if you're relying solely on money from customers, you're going to be restricted in how fast you can grow, especially in the beginning.
Let's face it. Everything costs money. Incorporating your company costs money, developing a product costs money, marketing that product costs money, waking up in the morning costs money. If reason number one why people don't become entrepreneurs is that they fail to act on their ideas, reason number two is that they're unwilling or unable to spend the money necessary to execute on those ideas.
I fall victim to this more often than I'd like. I don't enjoy spending money, even other people's money. I'm frugal by nature, just ask my notoriously under-privileged kids. This frugality has been more of a plus than a minus on my entrepreneurial journey, but it's also made things more difficult, and probably kept me from acting on one or more ideas that could have returned a lot on any initial investment.
So you'll most likely need some money before you get your first customer, or if your future plans cost more to implement than your revenue stream can support. That money is going to have to come from somewhere, and the best place for it to come from is you.
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.
Self is the next best way to fund your startup after Customers, and self-funding is always going to be a requirement. An entrepreneur should always have some of their own money in their startup, and the more money they put in at the beginning, the better off they'll be at the end.
In fact, I'll go so far as to say you should never go after Friends and Family, Angel, or VC funding without having your own money invested first.
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THE SHOW: Hire What You Suck At
Episode 3.2 featuring 49ers QB Thad Lewis
As an NFL quarterback, Thad Lewis has a couple of things working in his favor that translate well to becoming an entrepreneur, including available capital and great connections. But there are also areas he's not 100% versed on, like technology and marketing. Oh yeah, he also doesn't have a lot of time on his hands. His day job is a little more than 40 hours a week.
Even the best entrepreneurs aren't going to be good at everything. And even the most well-funded entrepreneurs don't want to lose too much control by farming out too many parts of the business. Startup is be a constant struggle of learn versus hire, no matter how long you've been at it.
So where do you start? And how do you start?
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THE SHOW: Why You Shouldn't Chase Venture Capital
Episode 3.4: The Last One With Thad Lewis
In our final episode with special guest Thad Lewis, we talk about sales and we talk about funding, the way they're related, and how they're different. Thad Lewis is an NFL quarterback, and in that, he's got a couple of things working in his favor that the average entrepreneur does not, namely, connections and money. But this doesn't necessarily give him a leg up.
We talk about Venture Capital. Thad doesn't need it. Thad doesn't want it. But he could get it, and he can also get money from other sources (friends, the bank, etc.) Outside funding should be the last thing on the entrepreneur's mind until they absolutely know they need it, so we talk about that here.
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THE SHOW: Why Startup is Like Being an NFL Quarterback
Episode 3.1 featuring 49ers QB Thad Lewis
This episode features a very special guest and extremely cool human being: San Francisco 49er quarterback and entrepreneur Thad Lewis. Aside from being a working NFL QB, Thad founded TL9 for his future after football and as a way to give back to the system that got him where he is. He's not alone as an athlete entrepreneur, and that's because there are a ridiculous number of parallels between sports and startup. We start covering them here.
Thad is funding TL9 himself. He's also overseeing all production, marketing the company -- hell, he's even shipping hats himself at the moment. You need to go to thadlewis.com and buy a hat, if just because Thad will be the one sending it to you.
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VIDEO: How To Market a Startup - Episode 2.1
Teaching Startup: The Show
I met WedPics co-founder Justin Miller about 10 years ago when he came up with the idea to establish a music festival as a marketing event for his photo-sharing startup DejaMi. You heard me. A music festival. Bands, venues, tickets, the works. I immediately fell in love with the idea for its boldness and its batbleep insanity.
Entrepreneurs are usually terrible at marketing, especially first-time entrepreneurs. And that's the core of this episode -- How To Market Your Startup -- where we dig into offline vs. online marketing tactics and how one must complement the other in order to see any success out of either.
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