The best way to get investors for your business is to get customers that pre-pay for your products or services.
Many companies have raised capital and gone belly up. The key to successful financing is to accelerate value creation. There’s no better way to validate that you’re creating value than to raise funds from your customers. Customers are the only constituency who can guarantee you’ll stay in business.
Any funds needed to accelerate growth beyond customer prepayments could be provided through equity such as an angel investor or a venture capitalist or through debt such as a bank loan or a type of bond offering. Before raising these funds, it’s essential to have plenty of customer funds first—so that you get the best deal. By the best deal, I mean staying in control of your company.
Contributors: Eisaiah Engel from Founder Friendly Standard LLC