How do you go about funding your startup? Every startup needs some form of funding, even when bootstrapping. Something to cover the basic costs of operating a business, including servers, incorporation, tools, and everything in between.
We often see companies like Airbnb and assume they started with funding or smooth early traction, but the reality is many of them were incredibly scrappy in the early days.
A lot of startups, especially SaaS companies, begin as agencies. They use client work to fund internal experiments, and sometimes those side projects evolve into full companies.
Here are some of the most fascinating examples of startup funding done the scrappy way.
5. Spanx: Starting with savings
Spanx has one of the most fascinating founder stories. Sara Blakely had no industry connections, no venture backing, and no external funding.
In 1998, she was a 27-year-old door-to-door fax machine salesperson. She started her company with just $5,000 in personal savings. No team, no investors, and no manufacturing background.
She wrote her own patent application to save money and cold-called manufacturers until someone agreed to work with her. That early scrappiness became the foundation of a billion-dollar brand.
4. Basecamp: From agency work to product business
Basecamp started as a web design and development agency called 37signals. The founders were doing client work to pay the bills, but they kept running into the same internal problem: project management tools were messy, overcomplicated, and not built for how they actually worked.
Instead of raising funding or hiring a large team, they built a simple internal tool to manage client projects more effectively. That tool eventually became Basecamp.
The key shift was intentional. They did not immediately spin it out as a venture-backed startup. They used agency revenue to fund development while keeping the product extremely focused and profitable from early on.
Over time, Basecamp evolved into a fully independent product company built around a philosophy of simplicity, profitability, and sustainability. Even today, it stands as one of the clearest examples of a software company that chose discipline over rapid scaling.
3. GoPro: Selling belts to fund cameras
GoPro founder Nick Woodman started with a very different problem. He wanted a better way to capture surfing footage, but needed capital to build early prototypes.
To fund the idea, he sold inexpensive shell bead belts out of a van while traveling between surf spots. He also used personal savings and support from family to keep development going.
The scrappy part was not just fundraising, but building and testing the product in real environments while still figuring out how to pay for it.
2. Mailchimp: The side project that became the main business
Mailchimp did not begin as a standalone startup. It was originally built as an internal tool inside a web design agency to help clients send email campaigns.
Instead of raising money or spinning it out immediately, the founders continued running it as a side project. Revenue from agency work helped fund operations while the product slowly gained traction on its own.
Eventually, the side project outgrew the agency entirely and became the core business, scaling into one of the most well-known email marketing platforms without venture capital.
1. Airbnb: When cereal boxes kept the dream alive
This is by far the most iconic example. Selling cereal boxes to fund a startup sounds absurd, but it worked. Before becoming a global hospitality platform, Airbnb’s founders were struggling to raise money and keep the company afloat. One of their most famous moves was selling themed cereal boxes during a U.S. election cycle.
They created limited edition boxes inspired by presidential candidates and sold them as novelty items. It was not a scalable business model, but it worked as a lifeline. The project generated enough revenue to support early development and kept the company alive at a critical moment when investors were not convinced. What stands out is not the cereal itself, but the mindset behind it, treating anything as a funding opportunity when runway is running out.
Your job as a founder is to extend your runway. That often means finding creative ways to fund the startup while the core idea is still taking shape. The funding is rarely the main story. The main story is survival long enough to get to product-market fit.
Keep the main thing the main thing, and use whatever tools you have to stay in the game until it works.