How To Start A Business With NO MONEY (What The Rich Don’t Tell You)

TL;DR

You can start a business with no money by using customer deposits to cover costs, seeking carefully structured support from family and friends, building relationships with angel investors, or pursuing crowdfunding and venture capital. The speaker used a 50% upfront payment to fund 100% of the costs for his Coaster Ads service concept. Read on for specific funding approaches, risks, and investor-pitching advice.

Transcript

i asked 25 people what was stopping them from starting a business 24 of them said money i find this really frustrating because believe it or not you don't need any money to start a business i'm going to tell you a story how i made 2 million u.s dollars starting with nothing and i'm also going to reveal four easy ways you can start a profitable busi... Read More

Key Insights

• 😇 Starting a business with no money can be achieved through creative strategies like leveraging cash flow and attracting angel investors.
• 👪 Seeking support from family and friends should be done with clear communication about the risks involved and the potential for equity-based returns.
• 😇 Developing relationships and asking for help rather than direct funding can increase your chances of attracting angel investors.
• 🤨 Crowdfunding provides various options for raising funds, including equity crowdfunding and product crowdfunding.
• 🤑 Clearco offers a unique concept of raising money based on projected cash flow, allowing businesses to obtain funding without giving away equity.
• 🍄 Building relationships, having fun, and injecting excitement into the fundraising process can create a positive experience for both investors and entrepreneurs.
• 🗯️ Researching and understanding different VC firms and crowdfunding platforms is crucial to finding the right fit for your business funding needs.

Questions & Answers

Q: Is it really possible to start a business with no money?

Yes. The speaker says 10 of the 19 companies he started required no external money, including Fluid, which he later sold to PricewaterhouseCooper. His four approaches are customer-funded cash flow, family-and-friend support, angel investment, and crowdfunding or venture capital.

Q: How can customer deposits fund a new business?

Pitch a service or idea to a prospective client, then request a deposit before beginning the work. For Coaster Ads, the speaker charged clients 50% upfront, and that payment covered 100% of his costs for production, staffing, and distribution.

Q: What example shows how a business can start through cash flow?

The speaker pitched Coaster Ads, an advertising concept involving branded coasters, to prospective clients. When United Airlines advertised on the coasters, the 50% advance payment funded the coasters, the distribution team, and the other required elements.

Q: What precautions should you take when borrowing startup money from family or friends?

Make it clear that they could lose all the money and should treat it as if it has already been written off. The speaker recommends putting that understanding in writing and confirming that the loss would not damage the relationship.

Q: Should family and friends receive equity for supporting a startup?

Equity is one option because it lets supporters benefit if the business performs well. However, the essential point is to communicate the startup risk clearly, including the possibility that their entire contribution could be lost.

Q: How should you approach an angel investor?

Initially ask for help or advice instead of directly asking for money. This can reveal whether the investor has useful knowledge, skills, and contacts, which the speaker says may be more valuable than money during a business’s early days.

Q: What should you evaluate before accepting an angel investor?

Take time to understand the investor’s motivations, moral code, knowledge, skills, and contacts. The speaker warns against rushing the relationship and says the opportunity should also feel enjoyable, because he personally invests in businesses when the journey will be fun.

Q: What crowdfunding and venture-capital options can fund a business?

The existing guidance identifies equity crowdfunding, which exchanges business equity for investment, and product crowdfunding, which pre-sells an idea or product to fund manufacturing and marketing. For venture capital, research what each firm expects and use resources such as AngelList and Crunchbase to identify relevant investors and their previous investments.

Summary & Key Takeaways

• Starting a business with no money is possible by leveraging cash flow. Pitch your business idea to potential clients and ask for a deposit upfront to cover costs.

• Seek support from family and friends, but make sure they are aware of the risks involved and consider equity-based arrangements to benefit them if the business succeeds.

• Approach angel investors by asking for help rather than money. Build relationships, gain knowledge and skills, and show them that investing in your business will be enjoyable and rewarding.

• Explore crowdfunding options, including equity crowdfunding for investments, or product crowdfunding to validate and fund a specific product or business idea.