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Funding VS Revenue?

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...

9 Replies

Jeffrey Pearl
1
0
Jeffrey Pearl Entrepreneur
Entrepreneur, CEO and Sales Leader
It should be revenue first
Martin Omansky
1
0
Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
Unquestionably revenue. Sent from my iPhone
Arthur Lipper
0
0
Arthur Lipper Entrepreneur
Chairman of British Far East Holdings Ltd.
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
Rob Gropper
2
0
Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
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 Gropper
2
0
Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
@ Arthur L, without revenue where do the royalties come from?
Arthur Lipper
0
0
Arthur Lipper Entrepreneur
Chairman of British Far East Holdings Ltd.
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
Tom DiClemente
1
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Tom DiClemente Advisor
Management Consulting | Interim CEO/COO | Coach
Revenue always. Not all startups require funding.
Gabor Nagy
0
0
Gabor Nagy Entrepreneur
Founder / Chief architect at Skyline Robotics
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
0
0
Rod Abbamonte Advisor
Co Founder at STARTREK / @startupHunter / @startupWay / @CoFounderFound / @GOcapital / @startupClub / @lastminute
For sure revenue first
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