When is the best time for a web based startup to look for funding and how?


I plan to have a web startup but the implementation is costing me a lot. Is it acceptable to look for funding at this stage? If yes, how do I do it and what are the parameters which will increase the chances of this startup getting funded?


asked Oct 22 '09 at 18:49
56 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

4 Answers


Traction, traction and traction. That is your best chances for getting funded. Show that you are creating value. At very least, get a prototype out.

Like anything in real life, there is no silver bullet here.

Yes, it is acceptable to look for funding. Question is, can you find one?

If you are top-notch proven entrepreneurs (e.g. Marc Andreesen), then, maybe you can get funding only with idea alone. Otherwise, 3Fs (friends, families and foes) might be your best bet. I personally stir away from 3Fs. They generally invest based on personal relationship rather than truly understand your business.

Another solution is to work on your idea part-time and slowly switch it become your full time gig.

answered Oct 22 '09 at 22:11
Hendro Wijaya
1,408 points
  • I truly swear by your answer here, should help a lot. However, there are a few ideas which need a good sum to have even the prototype made and even I like to stir far away from the 3Fs. Will post more queries/questions soon. @everyone: Thanks :) – Himanshu 14 years ago


I agree with the traction comment. Having some paying customers or a decent group of beta users will go a long way toward proving your business is a sound investment. Most venture capitalists are much less adventurous than they sound.

Fund timing is a factor. You'll have a much better chance of getting fund shortly after the VC firm has raised a new fund rather than late in their funding cycle.

Time of year matters, too. Most angels and limited partners are on vacation during the summer months or during holidays. You'll have a better chance of getting the attention of multiple VCs at once if you try to raise money during normal business periods. (For example, in the US, the month of December is a lousy time to raise money because it falls between Thanksgiving and Christmas.)

answered Oct 23 '09 at 00:11
D Thrasher
894 points


You should be able to get to traction with savings, friends & family and credit cards. Once you get traction, you will be able to easily raise money from professional investors.

answered Oct 23 '09 at 19:35
379 points


Perhaps not the answer you're looking for, but are you sure you need funding?

Aren't your investors going to look for your business to be profitable as soon as possible? Why not self fund with that?

At the very beginning you will definitely need some money for design/graphics/coding, but assuming the idea is good enough (and why would you pursue anything else), in addition to self funding you can give a reasonable amount of equity in exchange for work.

answered Oct 23 '09 at 19:40
Duncan Wilcox
241 points
  • I agree with the idea that I can offer reasonable amount of equity in exchange of work but with due respects, not everyone is able to understand/realize its value. And if self funding was a possibility, one won't be looking at the idea of funding :) – Himanshu 14 years ago

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