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March 07, 2007


great post

perhaps there might be a distiction between selling securities to customers and using customer finance as seed capital

personally, I've seen shops like http://www.squarespace.com/ achieve great results by preselling their product at a discount, and then using the cash to build and deliver the product to presold customers

this approach also seems to work in property development...or any other space where contracts for future delivery are popular

Spot on. The best funding is revenue. Many start-ups can defer or minimize the dilution they take on by getting advanced bulk purchase orders from customers by giving a discount. This isn't equity, so it doesn't create control issues or dilution.

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