What makes you think YOU need funding?
I’m going to continue my funding bashing. There is nothing wrong with funding, but don’t chase it until you actually need it. Let’s have a look at some commonly quoted success-stories.
Surely you need some funding to start something as ambitious as a search engine, right? Wrong. Larry Page started working on Google in January 1996 and was soon joined by Sergey Brin. Crawling started in March 1996. Google ran off university servers first under the name BackRub. The domain google.com is registered in September 1997. Yet, Google doesn’t get their first funding ($100.000) until August 1998, two and a half years after starting on the project. And they didn’t incorporate until September 1998.
In October 2003 Mark Zuckerberg launched facemesh, a hot or hot site for Harvard students. In February 2004 he launched thefacebook.com which grew like wildfire. First funding was received in June 2004 ($500.000), soon followed by a few larger rounds. Although the timeline here is shorter, it’s another example of a startup that build and launched first and didn’t receive funding until (at least some) success was “proven”.
Yahoo started out as a hobby project by Jerry Yang and David Filo in January 1994. By the end of 1994 Yahoo has recieved over 1 million hits. Yahoo was incorporated in March 1995. In April 1996 they IPO’d. I can’t find any reference to early funding (seed, angel) so I can only assume Yahoo was bootstrapped.
From wikipedia: “Steve Jobs and Steve Wozniak had been friends for some time, having met in 1971, when their mutual friend, Bill Fernandez, introduced 21-year-old Wozniak to 16-year-old Jobs. Jobs managed to interest Wozniak in assembling a machine and selling it.
Jobs approached a local computer store, The Byte Shop, who said they would be interested in the machine, but only if it came fully assembled. The owner, Paul Terrell, went further, saying he would order 50 of the machines and pay US$500 each on delivery. Jobs then took the purchase order that he had been given from the Byte Shop to Cramer Electronics, a national electronic parts distributor, and ordered the components he needed to assemble the Apple I Computer. The local credit manager asked Jobs how he was going to pay for the parts and he replied, “I have this purchase order from the Byte Shop chain of computer stores for 50 of my computers and the payment terms are COD. If you give me the parts on a net 30 day terms I can build and deliver the computers in that time frame, collect my money from Terrell at the Byte Shop and pay you.”
With that, the credit manager called Paul Terrell who was attending an IEEE computer conference at Asilomar in Pacific Grove and verified the validity of the purchase order. Amazed at the tenacity of Jobs, Terrell assured the credit manager if the computers showed up in his stores Jobs would be paid and would have more than enough money to pay for the parts order. The two Steves and their small crew spent day and night building and testing the computers and delivered to Terrell on time to pay his suppliers and have a tidy profit left over for their celebration and next order. Steve Jobs had found a way to finance his soon-to-be multimillion-dollar company without giving away one share of stock or ownership.”
So tell me again. Why do YOU need funding?