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Im in the beginning process of a webapp that deals with advertising. When should I start looking for funding?

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Tyler, I think this question has lots of potential. I would explain why you think you need funding, is it because you want to hire someone (for what?), you want to put more features into your application. Just give us something more so we can give you the best answer. – Geo Nov 9 at 3:45

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When you absolutely need it.

"Bootstrapping puts you in the right mindset as an entreprenuer. You think of money more as something you make than something you spend. That's the right lesson, that's the right habit, the right imprint on your business brain. You're better off as an entreprenuer if you practice making money than spending money."

http://gettingreal.37signals.com/ch04_Whats_the_Big_Idea.php

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The most common reason for business failure is lack of capital so I would suggest looking immediately whether it's savings, credit cards, friends & family or investors.

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Completely agree with Ryan here. The last thing you need to be focusing on right now is raising funds. If you are building a webapp the focus has to be on getting it out to customers as quickly as possible and seeing you get any traction.

Once you have some sort of traction and a growing user base you will be in a much stronger position to raise money.

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I can tell you where not to go in the UK - government organisations like Business Link. Their aim is to help SMEs and they have grants etc but they prefer to help manufacturing organisations buy a forklift truck than a software product startup. They only understand tangible assets and you have to be an employer of more than 5 generally to get any assistance.

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