

How to Get Funding for Your Startup - KMinshew
http://www.thedailymuse.com/entrepreneurship/ways-to-get-funding-for-your-business-idea/

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patio11
Consider also the option of getting funding from a first customer. Many, many
people have signed a contract on the basis of a napkin pitch before -- for
example, approximately every consulting engagement ever. You can even sell the
same napkin to multiple people in parallel. You can then take the contracts or
memorandums of understanding to a bank and say "Hey, these represent money in
the future, can we have money today?" and have that happen.

I apologize to all the business guys who are looking at me in slack-jawed
amazement right now but they don't teach this stuff in engineering school.

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mindcrime
I love the idea of fund-raising from customers. There are a few different
angles on it, and one memorable one was the TextDrive thing[1][2].

That turned out a little bit controversial later[3], but it illustrates some
nice, creative thinking. Is there a way you can get your customer to commit
some money today, to an extent that they might not otherwise, based on future
considerations? If you can do it without creating a scenario that bankrupts
you _in_ the future, it might be worth a shot.

[1]: [http://www.joyent.com/blog/celebrating-textdrives-three-
year...](http://www.joyent.com/blog/celebrating-textdrives-three-years)

[2]: [http://photodude.com/2004/06/01/textdrive-or-how-to-
raise-40...](http://photodude.com/2004/06/01/textdrive-or-how-to-
raise-40000-in-4-days)

[3]: [http://techcrunch.com/2012/08/16/cloud-computing-company-
joy...](http://techcrunch.com/2012/08/16/cloud-computing-company-joyent-
leaves-early-supporters-out-in-the-cold/)

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snorkel
"Many banks, such as Bank of America and Wells Fargo, have recently announced
increased commitment to small business."

Hah! Nice one. Yeah, I once walked into a BOA branch myself and asked about
start up funding, me being a long time customer, bills all paid on time, and a
decent amount of funds in savings accounts there, surely they would consider
helping me start a business, right? HA HA HA!!!

The deal is you have to be an established business that has already been
banking with BOA with for _at least two years as a business_ before they
consider granting you any type of business loan. Without that you can have a
free lollipop from the bowl and then get the hell out.

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agibsonccc
One other thing not often thought of. Capital is expensive. Not only do you
lose some control when you take capital, you now have a responsibility to
investors. Many seem to, in my experience (take that as you will), jump in
acting like it's free money. Raising capital isn't the end goal. It's just the
beginning. With a more traditional fund with actual customers approach, it's
reasonable to do business as you'd like (obviously this invokes a debate of a
startup vs a life style business) but with customer funding, you not only have
validation, but you can always raise a more favorable round later. Github is
one very good example of this. In the end, cash is king.

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joshuaellinger
Boy, that's a thin article.

Bootstrap good. If you need $1M+, you need VC. Duh.

The advice is okay hardly 'hacker news'.

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toddrew
Accelerators should have been mentioned in the article.

