When I started my SaaS (that stands for Software-as-a-Service) startup Flowtown my co-founder Ethan and I had a tough decision to make…
How do we fund the company?
Even though I had the capital to self fund the whole thing, as I had just sold my previous company Spheric, he was 23 and didn’t have a penny to his name.
So this is what I did…
It was Friday, and I said, if you can find a way to raise $15K, I would fund the rest.
On Monday he called and said he had the money!???
That’s when I learned how great of a person he was.
You can listen to how he did it in this week’s video, alongside the 8 other strategies you can use to raise money for your startup.
I go deep into all 8 strategies in the video…
But if you’re looking for a quick primer, here are my 2 favorites:
- Crowdfunding: I like this one because it also has the side effect to help you validate the idea as well. If no one buys, then it might be an indication that the idea is bad, or that you packaged it wrong. I’d rather find out quickly before I invest a ton of time and money to fix things.
- Venture capital: Even though most people think VC’s are horrible, I’ve learnt that there’s something powerful to having incredible investors. It’s a quick way to establish authority in a space, it provides a sense of confidence (if you get the right investors) that you know they’re in your corner, and you get the positive peer pressure to report your numbers to an external group of people.
You might of expected some kind of secret government program, or easy way to get banks to lend you money, but I’m a big fan of testing and validation…
And nothing works better to prove you have an idea worth pursuing than having others take their hard earned money and invest in your business.
My good friend Clay Hebert, a crowdfunding expert, once said “… the cost of failure will eventually go to $0 because of crowdfunding.” and I’m a big supporter of this.
So if you have big dreams, there’s a good chance you’ll need some money to fund them.
Be sure to study all 8 of these strategies and use them accordingly.
If you have any questions for me on how you should use them, be sure to leave a comment with your questions – that’s best way for me to help!
