Minimum Viable Product · Fundraising

Funding VS Revenue?

Sydney Wong Founder at VenturX

October 3rd, 2016

I am working with early stage entrepreneurs and many are first time entrepreneurs. I am still doing my customer discovery and I have come across an interesting question with working with entrepreneurs who have a business idea. What is more attractive to early stage entrepreneurs? Is it reaching funding or reaching revenue?

This seems to dictate the way their are building their MVP or prototype / sales presentation. 

Please send your thoughts...

Rob G

October 3rd, 2016

revenue is always king. With revenue you at least have a choice to delay or forgo outside funding and all the issues surrounding it. If you do need/choose to raise outside capital, the stronger the revenue picture the more favorable the terms to the entrepreneur. No revenue means a much longer and harder road to funding (if ever) and less favorable terms. 

Rob G

October 3rd, 2016

@ Arthur L, without revenue where do the royalties come from? 

Jeffrey Pearl Entrepreneur, CEO and Sales Leader

October 3rd, 2016

It should be revenue first

Martin Omansky Independent Venture Capital & Private Equity Professional

October 3rd, 2016

Unquestionably revenue. Sent from my iPhone

Tom DiClemente Management Consulting | Interim CEO/COO | Coach

October 3rd, 2016

Revenue always. Not all startups require funding.

Arthur Lipper Chairman of British Far East Holdings Ltd.

October 3rd, 2016

It is perfectly possible for pre-revenue companies to use royalties instead of equity to raise capital. See many of the writings on www.Royalties.Website

Arthur Lipper Chairman of British Far East Holdings Ltd.

October 3rd, 2016

The royalty payments are, unless otherwise agreed, dependent on there being revenues. The royalty can be for am agreed period commencing when revenues reach an agreed level. See the many articles and website calculators at www.Royalties.Website

Gabor Nagy Founder / Chief architect at Skyline Robotics

October 3rd, 2016

Customers and revenue first. Other people's money (funding) as a last resort.

Bob Smith had a brilliant quote:
There is a giant difference between customers and investors. If you do most things right, a customer will not want his money back.
In fact, the better you do things, the more likely that customers will come back to give you more money for more of your product or service.
In contrast, even if you do everything right, an investor will want all of his money back. And he will also want some of your money on top of that.

- Bob Smith  The Dog Barks When the Phone Rings - An Engineer's Guide to Solving Problems

Rod Abbamonte Co Founder at STARTREK / @startupHunter / @startupWay / @CoFounderFound / @GOcapital / @startupClub / @lastminute

October 3rd, 2016

For sure revenue first