Finding the Funds for Developers

Article by Nick Walsh — Feb 20, 2025

You’ve got the idea for a piece of software, but the price tag to have it developed is well beyond your newly-formed company’s coffers. We chat with a lot of founders at this stage — whether they’re trying to hire some help or tap an outside agency — and the “MVP money” gap is wide enough to make many startups falter.

Moving forward starts with some introspection: How’s your network? What are you willing to give up? What’s worth handling on your own? Let’s take a look at potential ways to fund the first round of development.

Double-Check the Concept

First, we’ll take a quick detour into idea refinement. Constraints are a heck of a reason to find focus and, without guide rails, founders have a habit of making the rest of this harder on themselves.

Trim Your Idea Down

You’re going to try to do too much. Whether it’s a pet feature, something “everyone else” does, or taking a need several steps too far, your project’s first set of requirements won’t reflect the real resource limitations most face at this stage.

Does your application need team management at launch? Multiple subscription levels? A dozen integrations? Probably not. Even the “easy stuff” adds up quickly. If anything, it’s a good idea to trim too much here — you’ll inevitably need some room for the new ideas, must-haves, and customer-led feedback once implementation is underway.

It helps to reframe the goal: You’re looking to create enough value to reach tomorrow. That could mean:

Validating the idea and finding that elusive product-market fit
Getting something simple in the hands of customers
Demonstrating just enough to find funding

The first rung of success doesn’t have to be a fully-formed application.

Networking, Accelerators, and Validation

It’s easy to feel alone and overwhelmed by the amount (and impact) of decisions at this stage. Help — especially as a first-time founder — is out there in the form of:

Startup accelerators (like one we helped found here in Central Florida)
Incubation programs, often attached to universities
Meetups for like-minded entrepreneurs and adjacent interests
Mentorship, which tends to be a consequence of the first three items

You’ll never be as nimble as you are right now, and it’s a good time to weigh the experience of others against any gaps in your knowledge. As a bonus, networking will help with virtually everything else we’ll talk about from here on out.

Trade Time or Equity

Once you have an established piece of software, you’ll happily trade money for time. Until then, your time will feel a bit more disposable than cash. Here’s what it looks like to keep development “in house.”

Temporarily Wear the Developer Hat

You’re already doing everything else, why not give development a shot too?

The first version of your application can (and probably should) be a disposable tool to reach the next step. You don’t need to build an heirloom-quality piece of furniture; slap some lumber together, make sure it’s sturdy, and worry about replacing it once you’re certain of size and use.

These days, you have options even if hands-on-keyboard coding isn’t your thing. For non-technical founders, low-code and no-code platforms have matured and found their way into organizations of every size. And generative AI, of course, goes even further with customization and conversational feedback loops. It’s possible to describe what’s in your head and produce a perfectly workable prototype.

There’s a caveat, as you’d expect from anything that feels sufficiently like magic: After using one of these tools, tap into that network we described earlier for a review. Performance, security, and user experience could be lacking, all of which impact how you can use the result.

While it may not be user-ready, your temporary foray into engineering is a helpful tool for securing funding, validating the idea, securing a first customer, earning a partner, and so on.

Find a Technical Co-Founder

If the idea’s still out of reach and/or you’re missing a second voice to describe what’s actually possible, the technical co-founder route may be the right call.

This is usually the first equity split moment, and the start of (what should be) a foundational relationship for your company. Put another way: The story of how you met will earn a spot in the eventual book, if this all works out.

Words of warning, though:

Being the “idea person” isn’t enough. If you’re asking this individual to forgo pay, they’ll need to buy into your vision and respect the unique hats you’ll wear for the business.
They’ll want (and they’ve probably earned) a say in the roadmap and direction.
The right blend of technical leadership now doesn’t necessarily translate to a CTO of dozens or hundreds of employees later. As the company grows, this partner’s role may change.

The finding part is hard. Ideally, it’s someone you already know, trust, and have experience working alongside. Failing that, we’re back to recommending networking.

Spend Someone Else’s Money

If paying for help is the best option, we’re back to needing the necessary funds from somewhere. Fortunately, there are a lot of potential somewheres that don’t involve debt.

Pre-Seed Investment

Traditional investment (venture capital, angels, friends and family, et cetera) is a big topic, but we’d be remiss to not give it at least a passing mention. It’s still out there — even though we’re past the peaks of 2021 and 2022 — but pre-seed capital is a hard route:

Investors (especially now) lean towards live products with customers, creating a chicken/egg situation: Need an app to get the funding to build an app.
Money follows the current “hot” technology or industry. It’s hard to get attention if you aren’t affiliated with the active gold rush.
Prior success (another chicken/egg situation) and deep networks (there’s that word again) are also key, but neither helps you right now if you don’t have it.

Capital injections come gift wrapped with big decisions. How much of an ownership stake are you willing to cede? If the search for funding becomes a full-time job, is that okay? It’s someone else’s money, sure, but that doesn’t mean that it’s “free.”

Alternative Means of Funding

Investment in the typical, romanticized startup fashion isn’t the only source of early money. Over the years, we’ve seen founders earn:

Small Business Innovation Research (SBIR) grants from various government agencies
Built-in investment from various accelerator programs
Prizes from national or local pitch competitions

The catch? Most of these sources are tied to the calendar, and there’s no guarantee they’ll be available on your schedule. Also, as with pre-seed investment, a significant amount of effort goes into the planning, documentation, and pitching most of these sources require. If everything lines up, they’re worth a look.

Bootstrapping an Application

Your idea came from somewhere, and there’s a good chance that you’re able to earn money doing something related to the eventual end product. Could that something fund the idea?

We picked this path with our own platform, Code School, and stumbled on a wonderful loop in the process: Our consulting practice provided the funds and expertise to build educational courses, and they, in turn, helped us train employees, fed growth, and attracted future clients. Each legitimized and grew the other, to the point where investment would’ve only been considered as a means of acceleration.

Bootstrapping may not be the explosive start you’re aiming for, but it’s on your own time and avoids giving away equity when your fresh-faced organization is at its smallest.

A Symbiotic First Customer

This one’s situational and dependent on what you’re building: Could a single contract support development? We’ve been down this path too, where the first sale subsidizes ongoing work until the product finds its feet.

There’s opportunity in the right customer paired with an idea of sufficient value. If they’re willing to live with some initial instability, spin up time, and lack of polish, they stand to gain early access, influence over the roadmap, and a deal on pricing that could easily make the growing pains worth it. You’re giving them admission to the new swimming pool, but the deck chairs and hot tub aren’t ready yet. And a few bugs will be floating around.

Making the “lone customer” arrangement work requires a lot of open and honest communication. They’ve earned extra care (especially when it comes to feedback), but you’ll always be balancing their requests against the long-term goals of the platform. Some exceptions are expected, but all exceptions can be a sink of your valuable time.

Alternative Means of Payment

We’re often asked if we’ll accept equity in lieu of payment (or partial payment), as are many of our contemporaries. It’s something we’ll always consider — but virtually never accept, for a handful of reasons:

Any potential realization of value is years away, realistically.
We’d want things like board seats and regular financial statements but aren’t prepared to keep up.
Sales and marketing — a big piece of whether or not this product is successful — are out of our hands.
We’ll need to pull in some additional lawyers to make sure the equity agreement and future dilution possibilities are good to go.

It isn’t impossible for a vendor to accept the sweat equity route, but you’ll need to overcome the usual objections and find a group that’s truly bought into your vision. The process is virtually the same as finding a technical co-founder.

Zero to Something

It’s hard to pick the right funding path, and it’s hard to find the right way to deploy it. The good news? We’ve seen success stories with all of the methods above. The less good news? None of them are foolproof, either. Once you’ve picked your route, stay vigilant and keep an eye on what your hard work becomes.