Entrepreneurs can “fund’’ the first stage of their business by using their own unpaid labor and resources to create value. Rather than contributing cash, they might write code for a new iPhone app or build a workshop in their garage.
They did it: Facebook is launched from a Harvard dorm room by Mark Zuckerberg, Dustin Moskovitz, Chris Hughes and Eduardo Saverin.
Advantages: By investing your own resources without outside funding, you develop an idea on your own time. You control the decisions and any intellectual property you create.
Cautions: If you have partners, make sure you get full credit for your contributions. Draw up a written “deal memo’’ on the ownership percentage for each partner. A truly original idea conceived in an instant can be worth hours of computer programming, says M.J. Bogatin, an Oakland, Calif., attorney who has advised Bay-area start ups.