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Comment by nemasu | Hacker News Reader

I don't fully understand the business side of startups, legitimate question: When does a startup need funding? If you build an app and release it...shouldn't you somehow receive money from it (ads or whatever)? Do you need the money for advertising? Or?

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Generally speaking startups seek funding in order to accelerate growth. By taking on additional capital, they can hire more employees, allowing them to address the market faster, and thus unlock more revenue--sometimes more quickly, but not always. Realistically, a business trades profitability for growth when they take on outside money but they're hedging their bets that the growth potential accelerates their upside long (or maybe even short-ish) term.

Suppose you haven't released your app yet, or you have major changes to make to make your app as successful as it might be. You might have some revenue or none, but you probably won't have enough to hire 3 full-time developers (as an example).

Ah I see, never thought about hiring people. I ask because I'm working on an idea too (just released beta), but doing all the work myself after my full time job. I guess doing it full time would be best case scenario, but then again getting involved with investors can be a huge pain ( used to work at a startup, it did not end well ).

Whether investors are a good idea depends on your product, customers, market, and yourself. However, I'd recommend YC unequivocally.

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