I'd like to start a thread discussing the type of funding different startups are using and why. I think that there are a lot of people here who would like to hear the general experiences, advantages, and pitfalls relating to each. Are you:
Also - discuss why you went the route you did.
We are bootstrapping, sort of. We opted for a service + product model. We offer development services that generate immediate income, then pump that money back into building products.
This is not an easy model to follow, however. I know of a few famous successful examples (37signals being the main one), but the difficulties are numerous. So I wouldn't necessarily recommend it to others, unless you have a very disciplined team & clear vision.
We went this route because 37signals was one of our role models. Also, realistically, we didn't have a lot of personal capital from which to start. We also shied away from outside capital because we wanted to retain control over our products - at least in the early stages. Outside funding may be considered later, once we've released a product and seen how well the market reacted to it.
I'm bootstrapping, fully self funded. I fear screwing someone else’s money up but ok with losing my own. I'm still early and when the business proves itself out then I'll reassess but without having real metrics I just don't feel comfortable putting real money on it.
Also being very incremental in spending and methodical with most of my equity from sweat.