Entrepreneurs tend to be people full of ideas searching for ways to make those ideas a reality. For centuries, the path to this dream has been through funding. Searching out angel investors, attracting the attention of venture capitalists and pursuing grants becomes a central focus. So much so that entire websites are dedicated to the task.
In today's microtransaction-powered, crowdfunded global economy, is a wave of funding truly necessary to get your business off the ground? Everywhere you look, you can find success stories of businesses grown out of a garage or basement on a shoestring budget, sold to major companies for millions a few years later. Do you really need to focus on funding to successfully start a business?
Survival Without Funding
One question you can ask yourself is rather simple. "Can my business survive without funding?" If you're relying on gaining the attention of an investor, you're probably pinning your hopes and dreams on the money they will provide. Is this a sign you're looking to do too much, too fast? Are you trying to go all-in on development when you can take things slower, use creativity and wise decisions to build a stable foundation, and only then look to growth via investors?
If your company can survive without an immediate influx of cash, ride that wave as long as you can. The longer you can survive without it, the more time you have to develop a winning formula, a winning product, something that can hit the market and succeed without that investment.
On the other hand, if you're certain your company will crumble without investment capital, you might need to take a look at where that money will go.
Planning a Future Budget
If you're asking a venture capitalist for five million dollars to fund your startup, you had best have some plan as to how that money is going to be used. Kickstarter is rife with abandoned projects that raised their goals, only to whittle away their funds on frivolous expenses that fail to keep their business afloat.
When you put together a plan for every dollar you're given from an investor, you have an opportunity. Take a step back and look to see how each item on that list can be done differently. Can you take that expensive software license and find a cheaper alternative? Can you develop something in-house, sacrificing time instead of money? Do you really need everything on that list, or is it a list of dreams and desires that aren't necessary to your future success? How much of it truly needs funding to be done, compared to how much can be done without that funding?
In many ways, seeking out funding is a trap for small business owners. Too many entrepreneurs are too caught up in the drive to achieve funding that they forget how capable they can be without it.
Investing in the Future
When you start a business and grow it from scratch without funding, you gain something. You gain confidence. If you could grow a successful business without capital once, you can do it again; any investment is icing on the cake. You also gain a reputation. You're the success story that didn't need an angel investor to lean on. You're a sound investment in the future, because you can succeed even without that investment. You'll make things work, and an investor will be smart to put their faith in your abilities.
Not every business can get away with no funding, of course. The question is, can yours? Take a look at your proposed budgets and the resources that are available to entrepreneurs; you may be surprised at what you can accomplish.