software for startups

Creating Cost-Effective Software for Startups

Since unforeseen problems with funding can greatly impact the ability to produce a great software product, let’s take a look at four commonly known ways startups get funding. It is important to remember that the amount and source of financing do not determine a company’s success.

1. Self-funded aka Bootstrapping

Startup funding starts with the company owner’s money. It can come from a savings account, a bank loan, or credit cards. This is often the way for anyone with a startup to be free from outside influence and control every business decision. Self-funded companies often manage their money prudently. This is a great way for future investors to see the company’s track record and to be taken seriously.

2. Friends and Family

This is often the fastest and most common source of funding for a new business. Family and friends will often loan money without interest included in the repayment. There is usually a longer repayment period and friends and family expect a lower ROI (return on investment). This is easier than a conventional loan and friends and family can be a great support network. This kind of funding can negatively impact or even destroy a healthy relationship if the business fails.

3. Funded

Funded means professional investors are footing the company bill. This can include angel investors, incubators, accelerators, crowd-funded, and more. This allows companies to grow a lot faster because there is usually more money available. Investors of any kind are often great networking opportunities because investors have connections to the right people. The downside is that investors usually gain a stake in the company and can influence business decisions.

4. No Money

This is the least desirable way to create a startup, but it has to be creative in order to work. Without money, people are very careful about expenses and often barter goods and services.  Employees and people associated with the company are almost always volunteers or interns. It is extremely difficult, but not impossible for a startup to grow when there is no money.

Also read: Reasons Why Most Startups Fail

 

Money is integral to running a startup. A minimal viable product is the most cost-effective thing to produce before presenting a final product to the market.

Just to be clear, an MVP tests how the target audience responds to your new product. It is software with minimal features. A minimal viable product is a usable, bare-minimum, basic version of your final product. MVPs are always created so that product features can be built, changed, added, or removed over time through testing. Users of the MVP are the earliest product test market.

If you would like more information about the ways Dignitas Digital can help your startup with software development, contact us at hello@dignitas.digital.

 

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