Funding and Scaling the Lead Generation Float
Description
The critical "float problem" in lead generation creates a timing mismatch where you pay for traffic today but receive revenue 30-60 days later. We establish the 60-90 day reserve rule: operators need liquid reserves equal to two to three months of total operating expenses to survive cash flow disruptions. Bootstrapping strategies include revenue-funded growth, unit economics mastery, and the phased investment approach that minimizes risk through validation, optimization, and scale stages. External funding options include bank lines of credit, SBA loans, revenue-based financing (RBF), and angel investors. A cautionary tale highlights how early excessive dilution (50% equity for $250K) can poison cap tables and block future funding. Capital allocation frameworks span across stages and exit considerations, noting that PE buyers value revenue diversification, clean unit economics, and bulletproof compliance documentation when acquiring at 3-9x EBITDA multiples.





