With all the talk about startup financing rounds, it’s easy to forget that most startups are self-funded. Self funding ranges from personal savings to credit cards to consulting with one common theme: resourceful entrepreneurs working through adversity to achieve their goals.
Just last week, I met with an entrepreneur who’s been working on her startup for several years while still having a day job. She identified a valuable, urgent problem (hair on fire!) and was able to get the future customer to fund development of the product while she retained the intellectual property. Customer-funded startups are often the best.
Locally, I know an entrepreneur that drove Uber on nights and weekends, especially during concerts and events for surge pricing, so as to work full-time on his startup. After doing this for a year, and getting some initial traction, he then raised money from investors. Traction first, investors second.
Of course, the best known local success story is self-funded: MailChimp. In the early days, MailChimp was a web consulting firm before morphing to an email marketing platform after a few years. Now, MailChimp will do over $600 million in revenue this year and is one of the most valuable tech companies in the country.
The next time an entrepreneur laments a lack of funding, make sure they know that funding isn’t a pre-requisite for success. The main pre-requisite for success: grit.