Recently I have found myself going back to the lessons I learned from John Greathouse's class. His reading assignments have seemed to creep up on me when I need to make a decision or discuss business concepts with the guys. John Greathouse also has a great blog, InfoChachkie, about start-up advice that I recommend to any current or future entrepreneur.
One of the topics that is extremely relevant to any venture is the idea of capital. Some start-ups choose to fundraise at the very beginning and borrow money from family or friends. Others may be able to get a successful kickstarter going or find some angel investors.
For our little venture we have decided to fund with our earnings. Since we don't have revenue (yet), our personal income and savings will suffice for the moment.
Using our own money also means we likely pay a lot more attention to the things we spend money on. We constantly discuss new gadgets and gizmos we want to get. I am sure between the three of us we could go out and buy $10,000+ worth of stuff in an hour that we think would help us. The key is that we are not going out and splurging.
We have chosen to make a list of the items we think are relevant and will help us in way X, Y, or Z. We are adding, deleting and changing the list based on new information and our team meetings. Yes, the three of us all had a moment when we just wanted to buy, buy, buy; but we knew that if we spent X dollars on something really cool and shiny, those dollars would be gone for something that we might actually need in the near future.
So yes, capital is extremely important; however, it is also extremely important to manage those dollars wisely.
-Posted by Jessica