Chapter 5. When and How Do You Find Funding for a Technical Business?

Money to build the business is the number one challenge for most technical entrepreneurs. However, it's not easy. Don't believe the urban myth that you can sketch your idea on a napkin, and professional investors will throw money at you. In reality, only 3 out of 100 companies that seek funding are successful with Angel investors (http://en.wikipedia.org/wiki/Angel_investor), and the success rate with venture capital investors (VCs) (http://en.wikipedia.org/wiki/Venture_capital) is even lower. A large percentage of startups never apply to either, simply because they aren't ready for the associated work.

This chapter explores the most common and most productive approaches for getting your startup funded as early as possible. Of course, every approach has its pros and cons. For example, with any outside investment, you give up some ownership and control, and with bootstrapping, your growth curve will likely be longer and...