The Best Startup Funding is Initial Sales

We all forget too easily: the best startup funding is sales. Sure, angel investment, friends and family, SBA loans, all of those options are necessary for most startups. But sales is better.

If you can, find the early customers. Give them a deal, make them important, work with them to optimize their needs; but make a sale.

Even if you need to go out and find investment — and I speak now as an actual angel investor — there’s almost nothing as convincing as actual sales. People are spending money. It makes a new business proposal far more credible.

True, not all businesses can do that. But a lot of them can. And, as we write about business plans and seeking investment and all, we forget the real sweet spot: finance growth by making the sales.

6 thoughts on “The Best Startup Funding is Initial Sales

  1. Is there a dollar number in sales or a percentage increase year over year that angels are looking to see? To put it into perspective, I am speaking of a bodycare business.

  2. Tim,

    You are so right. I use to be in VC and am now launching my own business again: http://www.Bcelebrated.com. We are working like crazy to create partnerships that will help us reach our target market because we know there’s a short period of time in which to make as many sales as possible.

    Good advice that many new entrepreneurs forget.

    Cheers,
    debra

  3. Couldn’t agree more. Call me old-fashioned – I conceived my startup venture around a business model designed to make money from day one (shock horror), and am currently focused on generating pre-launch revenue. It’s going well.

  4. You are correct Sir !

    That’s excellent advice and it makes me think there’s a
    potential book or a seminar or coaching for this very topic.

    The drag of it is, while we may be passionate about our ideas
    and good at our solutions, we still mostly stink at sales.

    I’ve even looked at a site called http://www.rephunters.com for
    help with the inevitable need for sales people.

    In your humble opinion, can these issues be worked out in
    a pay per sale type of an arrangement and still suffice for
    bootstrap funding if the margins are good enough?

    Thanks,
    Rick

  5. Having to rely on initial sales sure is a great motivator to get going. If you don’t have a chunk of investment cash you can’t afford to be slow. Makes you leaner and meaner, but more stressful, too.

  6. This is a good point, my business is more about a self promotion, creating a name. It isnt’ very attractive for angel investors, or I wouldn’t think it is, I’d be selling myself and it is easier to go directly to the fans and generate revenue first. Once I have proven my product can succeed, then I might be able to attract an angel investor. Sometimes, it just isn’t an option and that is when you go directly to sales, go door to door if you have to!

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