I've done a bit of googling on the subject but nothing really definitively answers the question. I've also seen a few similar posts here... but nothing hit the nail on the head. And to clarify, by capital, I mean money from investors.<p>I'm 23 and working on my first startup. Naturally I've gravitated to HN, and a central theme I've noticed is funding, funding, funding!<p>So... why?<p>The top two reasons that come to mind are the ability to advertise your product (which can cost a considerable amount of money, depending on your market) and sustenance (ranging from processing power to food, shelter, and office space). I'm sure it also helps that I'm "technical"... so I don't have to pay anyone else in that respect. And I'm also sure having a good team (employees) increases your chances of getting a product out the door in a timely manner... but there's a lot of overhead involved in that too - from the hiring process to bureaucratic organization.<p>To me... there's much more value in learning how to provide for yourself. I tend to relate investors to rich parents who give their children everything they want - and as a result, a lot of the time, these children are relatively ill-equipped for the real world. (Although, I can see how investments would greatly benefit someone who has already knows the ropes from bootstrapping their own startup.)<p>I feel like, in the long run, it would be much better to build a business from the ground up - on my own. It would force me to make the best possible financial decisions and get really creative with the marketing process. There's no way I would learn all of these important aspects to running an efficient, profitable business if I were given a million dollar shortcut.<p>HN... what is it really about? Bragging rights? For what do you really use all that money?
I guess if you're one guy on your own bootstrapping it, it's not terribly important, but if you have a team and you want to be able to pay them, pay for a space to work in, pay for business trips to meet potential customers/related services, then you'll need funds.<p>It gets more complicated if you need to get specialists -- people for web design, print design, SEO/analytics, PR...
Growth is the most important factor I think to seek investment. So you can rapidly expand which is sometimes needed: See the Foursquare vs. Gowalla battle.<p>Even traditional businesses which make a profit can seek investment too for several obvious reasons:<p><pre><code> - Diversification (New Products/New Market)
- Market Development (Existing Products/New Market)
- Product Development (New Products/Existing Market)
- Market Penetration (Existing Products/Existing Markets)</code></pre>