

Your opinions on startup funding - amrithk

Hi, 
A lot of discussion on funding for web startups has been centered on getting money from VCs, at least in the early stages. I am wondering if there are any web startups that have been self-funded from the beginning (from the founder's own equity and ultimately through revenues earned by the startup)?
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swombat
My start-ups have both been entirely self-funded so far. The first one was
profitable (though not overwhelmingly so). The second one is raising a second
round of capital, from wealthy friends and family, so you could still call it
self-funded (or, at worst, angel funded). We don't intend to need another
round of funding after that.

I don't see why self-funding should be surprising at all. It's very cheap to
start an online start-up nowadays.

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amrithk
Thats interesting. All I hear about is VC backed startups so it is refreshing
to see some self-funded ones. In my mind, it seems a startup can only be
sufficiently self-funded if it has a viable business model. How has your
experience been with this (given that one needs to be more creative in making
money in a web setting)?

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swombat
Well, both my start-ups certainly had viable business models. If you're
looking to make money, that usually helps. Even VCs will be happier to fund a
startup that has a viable business model.

I think the whole "make something people want" motto can be profitably
expanded to "make something people want enough to pay for it".

I strongly suggest you watch DHH's talk at startup school.
[http://www.omnisio.com/startupschool08/david-heinemeier-
hans...](http://www.omnisio.com/startupschool08/david-heinemeier-hansson-at-
startup-school-08)

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amrithk
Thanks for sharing the link.

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lakeeffect
TheFunded.com is a good source.

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amrithk
Thats an interesting resource. Thanks for sharing this.

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lakeeffect
You have to prove your not a vc to get a log-in, once you do the information
really opens up. It is worth the time and energy.

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amrithk
Yup. I guess I need to start by creating a LinkedIn profile. Don't currently
have one.

How easy is it to become a member? I am working with 2 other people to build a
site during weekends. I don;t really have a bio online and it will take me a
while to build up a suitable LinkedIn profile. Do you think this might be a
problem?

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lakeeffect
Its definitely worth a day if it takes you that long to set up an account.
They tell you who to approach, how to approach them. The pitches section is
great, you can now pitch VC's directly through the site. As long as you are
looking for funding it is the way to go.

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24pfilms
My startup is self funded, and we recently have a prototype that we will use
to generate an Angel Investor. We intend to use a Subscription Revenue Model
to hopefully breakeven in year 1.

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symbiotic
I'm currently working on a self funded startup with a few other people. It's
not so bad, although legal fees are the majority of our costs. The thing I
love so much about the web is that many ideas don't require any initial
funding.

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glen
We didn't get funding for Scholar360, but we had a pretty standard business
model that allowed for incoming revenue to offset further development costs,
legal fees etc. Another route is to keep your day job and just work at night
or on the evenings. That worked for us too.

We are starting a new company, www.nixty.com, that is more Web 2.0 and less of
a tried and true business model. We can do it because we have revenue from our
first company. I probably would have sought Angel funding if we didn't have
some extra money to invest.

