Bit by Bit Fund your startup with pieces of your finished product.
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Sell off little pieces of the pie to buy an even biggerpie--that's what Dennis D'Annunzio, 34, and TrammellHudson, 31, did to fund Rotomotion LLC, their Charleston, South Carolina,startup that designs, manufactures and operates helicopter robotsand aerial robotic systems. In 2003, they began developing systemsthat would make up their main product and realized they could sellthese components for other uses. For instance, they developed anInertial Measurement Center to measure movement of the craft andbegan selling it to other robotics enthusiasts. Components weresold for prices ranging from $350 to $5,500--a fraction of the costof their full robotic helicopters, which sell for $15,000 to$60,000. "Each stage helped finance the next stage," saysD'Annunzio. With $280,000 of their own money and $700,000 fromcomponent revenue, they've been able to launch their mainproduct, and they expect 2006 sales to hit $2.5 million.
To plumb your company's assets, determine what peripheralproducts or services you may have to offer, and make sure theydon't take away from your main product or service offering,says Lea Strickland, CEO of FOCUSResources, a growth consulting company in Cary, North Carolina.You might offer a different version of your product, license partof your idea, give seminars in your field or offer a product orservice to a limited geographic region. Be careful, though, saysStrickland, to protect your intellectual property and your brandimage-don't put out a substandard product that will hurt yourmain brand.
