STARTUPS: Raising capital to fuel a growth plan, bootstrapping for as long as possible - just two strategies facing startups every day as they look forward and hopefully avoid the dreaded deadpool. But with investment comes plenty of issues, not least the "equity" question. READ MORE on FundersAndFounders.
Some startups will get about $15,000 from family and friends, maybe $200,000 from an angel investor three months later, and about $2 million from a VC perhaps six months later.
If all goes well, of course.
Many talk about funding as if it is something startups need to do. This is not a given. The opposite of funding is "bootstrapping", something which both MailChimp and Airbnb did for a while until taking investment.
If you discount for a moment the need for money to simply survive, the attraction to the bootstrapping approach is obvious - every time you get funding, you give up a piece of your company. The more funding you get, the more company you give up. Everyone you give it to becomes a co-owner of your company.
So how does (and should) it work?
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NB: Cash greedy image via Shutterstock.