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Networking is still invaluable, but capital isn't a necessity in software startups. I do think that either bravery or a nesting egg to fall back on is though.
by eugenekolo2 11y ago
Networking is still invaluable, but capital isn't a necessity in software startups. I do think that either bravery or a nesting egg to fall back on is though.
- crdoconnor 11y agoIt depends upon the market. You couldn't really do health-care software without connections or capital, for instance. Same for anything finance related. Also, the markets that require the least capital/connections tend to be low margin and flooded with competition.
- ci5er 11y agoThat is certainly true, but you can work the deal on parallel tracks. With the customer (say HSBCor MD Anderson) you spec what you are planning to build, to be installed/deployed in 4 chunks, every six months over two years. Call this a $20M project. Then you go to the investor and say that you need the funding to satisfy the contract. Now, you usually would need to work this out in advance with the investor. After they've looked over your deal and poked at you some, tell them that you are going to go get a big customer with the permission to declare that funding is lined up pending contract. It doesn't seem to take much more time out of your day than doing one after the other, and often the investor will get so distracted by the large pending customer that the due-diligence process becomes a pretty cursory check-box affair.
- s73v3r 11y agoCapital still is a necessity because people still want to eat and put a roof over their heads.