How to Start a Tech Company With No Experience: A Beginners' Guide

Becoming the founder of a tech startup might sound intimidating — like you must be a genius software developer or hardware expert to compete in this industry's breakneck pace. A figure you might find surprising, however, is that according to reports from startup accelerators and VC funds, over 90% of tech startups are helmed by first-time entrepreneurs. What's more, you don't even need to have a technical skillset under your belt. It certainly helps, but that's what your co-founders and early team are for.

So, how does one go about founding a tech company without previous experience? This guide will show you the ins and outs of the process. Don't get it wrong, it's still not an easy endeavor to tackle, but hopefully, these tips will help you and motivate you to take the first steps.

Validating Your Business Idea

All startups are built on a business idea. The more you can simplify the explanation of this idea, the better. You should be able to convey at least the most basic description of your product or service, and how it makes you money, in just a few short sentences. This will help you pitch your company to potential clients, as well as potential investors.

Not all ideas are good ideas, though, and it's hard to judge them in an objective and unbiased manner if they're your own. 

Tech companies make this especially easy since you don't need to build a viable product to test its potential market adoption. You could simply build a landing page describing your product/service, then measure traffic or have people sign up for a waitlist.

Another way of measuring viability that requires a bit more effort is interviews and focus groups to gather user feedback. Back when we were first building Slidebean and conceptualized it just as an alternative to PowerPoint, we asked 100 people how they felt about our competition. If over 50% answered negatively (which they did), then our idea was viable.

A valuable tool we recommend to assess most of the key components of your early company, from business model to product-market fit, is the Lean Validation Board.

Download the free template

Finding a Co-Founder

Around 70% of unicorn companies in Crunchbase have a team of two or more co-founders, and there's good reason for this. It's well known that working at a startup requires one to wear many hats at once, which is best demonstrated in the earliest stages of the company. Ideally, you'll have every skillset you need covered from the outset, but it's practically impossible (though not unheard of) for a solo founder to have enough time —let alone experience— in all the areas required to run a company successfully.

As your business develops and you scale your operation, you'll be able to hire more people into your team to focus on specific functions. But until your company has enough runway to afford a consistent payroll, the first iteration of your team is expected to work for a salary smaller than the market standard, or sometimes no salary at all. This is where co-founders come in.

You may not know what type of person you need until you meet them in real life. That’s why it’s important to get out there and talk to people about your ideas. You could ask your friends if they would be interested in joining you on a startup journey.

Co-founders generally divide the responsibilities, risks, and rewards of the venture, playing a vital role in shaping the company's direction and success. While the motivations for becoming a co-founder are as diverse as the startups themselves, there's a few common reasons.

1. Complementary Skill Sets

A co-founder can bring essential skills that you may lack. Particularly in tech startups, it's common to have a co-founder duo where one person focuses on the technical side (building the product) while the other handles business and operations. This is often referred to as the "hustler, hacker, hipster" framework, where you need expertise in business, technology, and design​​.

2. Shared Workload

Building a startup requires wearing many hats and can be overwhelming for a solo founder. A co-founder can help divide responsibilities, making it easier to manage product development, marketing, fundraising, and other tasks during the earliest stages.

3. Increased Credibility with Investors

Investors tend to be more willing to fund startups with more than one founder because it signals a stronger founding team. Solo founders may struggle to convince investors that they can manage the many moving parts of a growing company. A solid co-founder team shows resilience, collaboration, and a mix of important backgrounds and skills​​.

4. Diverse Perspectives

Each co-founder brings a different perspective, which can lead to better decision-making. Having someone to bounce ideas off of or challenge assumptions can prevent you from making biased or narrow decisions, leading to stronger strategy and product development​.

5. Emotional Support

The emotional rollercoaster of building a startup is difficult to manage alone. Having a co-founder offers someone to share both the stresses and triumphs. This partnership can keep you motivated, especially during challenging times.

6. Attracting Talent

A strong founding team can help attract top talent. When potential employees see a well-rounded and competent leadership team, they are more likely to join the startup, knowing that the company is built on a strong foundation.

7. Increased Focus and Accountability

With a co-founder, there is often an enhanced sense of accountability. Each person is more likely to stay on track and be productive when they have someone else depending on them.

Keep in mind that the ideal co-founder should bring all, or most, of these to the table. In a way, the relationship you'll have with your co-founder is similar to marriage: you'll have to stick together through thick and thin for multiple years, willing to shoulder the other's work when there's trouble and facing financial highs and lows as a unit.

Because of this, the most common co-founder agreements are between people who knew each other beforehand and have worked together, maybe as partners in a previous venture or as coworkers in the tech industry. You must have a proven track record of a good teamwork dynamic and openness to make up for each other's shortcomings.

Finding a co-founder can be tough. There are lots of reasons why you might want to start a company with someone else. Maybe you share similar values and goals, or maybe you both have complementary skillsets. Whatever the reason, you should consider working together before starting a company.

Considering an Accelerator

Startup accelerators are structured programs designed to support early-stage companies by providing mentorship, education, and sometimes seed funding in exchange for equity (we'll explain equity further on in the article).

Typically lasting a few months, accelerators offer startups an intensive environment to refine their products, business models, and go-to-market strategies. These programs culminate in a "Demo Day," where startups present their progress and pitch their companies to a room full of investors, hoping to secure future funding.

The concept of an accelerator is similar to that of a venture capital (VC) fund. In said model, a partner raises capital from investors who rely on their expertise, then invests that money into startups. However, while VCs typically focus on making a few large investments, accelerators spread their capital across many smaller investments, offering hands-on support to help these startups grow and succeed. It's a smaller-scale and safer bet.

Accelerators can often offer smaller investments due to the value they provide in other areas. When assessing a list of startup accelerators, it's important to look beyond the size of the investment and consider the program’s reputation and track record of success. Success can be measured in various ways, including exits, IPOs, or the total funding raised by companies within the program.

For first-time founders, this added value and previous successes are especially important. An accelerator can offer you a safety net to learn and experiment while aided by experienced entrepreneurs, all while expanding your network and gaining new insights from fellow founders.

We keep a database of accelerators, their key characteristics and their application deadlines.

Go to our accelerator tier list

How Startup Funding Works

We mentioned earlier that accelerators, incubators and angel investors receive equity in exchange for their investments. In finances, equity refers to the value belonging to a particular shareholder, meaning that if a company was completely liquidated and all of its debt was paid off, the amount of money that a shareholder would receive from their shares is called equity.

Incorporation: LLCs vs. C-Corps

These are the two most common kinds of incorporation for successful tech startups, but if your business plan includes raising money from potential investors in several rounds, you'll likely want to opt for a C-Corp instead of an LLC.

A Limited Liability Corporation (LLC) is a business partnership where each owner has a set percentage of the company to their name, so the process of bringing in new investors who'll want a stake  —meaning equity— in the company is complex, difficult and slow.

C-Corporations on the other hand have the ability to create and distribute shares to new partners at any time, making the percentage of ownership for each partner a dynamic number without ever changing the actual amount of shares they own.

Because of this, startups will generally choose to incorporate as a C-Corp rather than an LLC.

A concrete example of how a C-Corp's equity works: A company has two co-founders, who incorporate and divide the company in 20 shares for each, making it so both of them own 50% of the startup's total equity.

Later on, they bring in their first investor, who asks for 20% equity stake (which is a bad deal, but besides the point). The company issues 10 additional shares for this new investor, bringing the total shares from 40 to 50, and the equity stake of each co-founder down to 40%, without changing the amount of shares either of them owns.

This is of course an extremely simplified scenario. As a rule of thumb, startups usually begin with 10 million shares, but the number can change depending on their business plan, the size of the founding team, and other factors.

You can learn more about equity and valuation here, or by watching this video:

Most investors prefer startups incorporated in Delaware because the state has a highly developed body of law governing corporations, which can lead to a high degree of predictability in the event of a legal dispute. 

Furthermore, A C-corporation is an entity designed to act as an abstraction layer between the operators of the business and the owners of the business, who may or may not be involved in day-to-day business activity. The power of a C-Corp is that it generally separates liability from the business owners, which is very important for investors.

We explain more about the process of incorporation in the video below.

Sources of Funding

In general, you'll probably be aiming to raise funds from venture capital. The are several ways VC firms may go about providing funding to startups, however.

Individual Investors

These are venture capitalists — wealthy individuals who have an investment portfolio usually focusing on a specific industry. They range from Angel Investors (people who inject capital into early stage business to get them off the ground) to the celebrity investors of Silicon Valley and Wall Street, like Peter Thiel and Elon Musk

Accelerators and Incubators

Startup accelerators and incubators are both aimed at helping early-stage companies grow, but they differ in focus and the stage at which they engage startups. While both provide mentorship, resources, and sometimes funding, the way they operate and the type of support they offer varies significantly.

Accelerators are designed to boost the growth of startups within a fixed timeframe, usually three to six months. During this period, startups participate in an intensive program that offers access to mentors, educational workshops, and connections with investors and industry leaders. The aim is to rapidly prepare startups for fundraising, often concluding with a demo day where startups pitch to potential investors. In exchange for a small equity stake, accelerators commonly provide an amount of seed funding.

On the other hand, incubators offer more gradual, long-term support, typically to startups in their earliest stages, sometimes even before they have achieved product-market fit and have settled on a viable product. Incubators provide office space, business advisory services, and access to industry resources, helping startups develop at a slower pace. Unlike accelerators, incubators rarely provide direct financial investment, instead focusing on creating a supportive environment to nurture a company’s foundational growth.

Alternative sources of funding

Crowdfunding
Crowdfunding has become a popular way for startups to raise capital without depending on traditional venture capital or angel investors. This approach involves gathering small contributions from a large group of people through online platforms like Kickstarter or GoFundMe. However, there are limitations to crowdfunding, such as limited opportunities for sustained growth and the common expectation that backers receive some form of reward or perk in return for their support.

Grants
Grants are funds provided by governments, nonprofits, or other organizations, and do not need to be repaid. They are often aimed at fostering innovation and growth in specific industries like technology, healthcare, or education. The application process is competitive, requiring detailed proposals that explain how the funds will be used. While grants offer the advantage of significant financial support without any equity dilution or repayment obligations, they often come with strict guidelines and post-funding reporting requirements.

Loans
Loans offer another funding route for startups, particularly when immediate cash flow is needed and the business has a clear plan for repayment. Unlike equity investments, loans allow founders to retain full ownership of their company. Startups can access various loan types, including traditional bank loans, Small Business Administration (SBA) loans, or personal loans. However, much like crowdfunding, loans may not provide continuous funding, and taking on multiple loans can lead to financial strain, especially when relying on personal loans or credit cards, which can accumulate quickly.

Funding Rounds

The process of securing startup funding involves multiple stages, each characterized by specific investor types, funding amounts, and company needs. Though there’s no strict definition of each stage — a seed round could range from $50K to $5M, per example — these phases help entrepreneurs identify where their startup currently stands in its growth journey.

1. Pre-Seed Funding

Pre-seed is typically the first step in fundraising, where founders rely on personal savings or funds from family, friends, and close professional connections to get their idea off the ground. At this point, startups are focused on building a minimum viable product (MVP) and conducting market research. The main goal is to validate the business idea, making it ready for future investments.

2. Seed Funding

Once the MVP is built, startups often move into seed funding to enhance the product, test the market, and expand the team. Angel investors, early-stage venture capitalists, and crowdfunding platforms are common sources of seed capital. This stage involves presenting a business plan that outlines growth potential, with funding amounts typically ranging from $10,000 to $2 million, though this can vary widely.

3. Series A Funding

After proving their potential through seed funding, startups usually seek Series A funding to scale up their operations. This stage targets companies that have validated their business model and are ready for significant growth. Series A funding amounts are larger, typically ranging from $2 million to $15 million, and often come from venture capital firms focused on early-stage investments. Startups must demonstrate strong market traction and provide detailed financial forecasts to attract these investors.

4. Series B and Beyond

By the time a startup reaches Series B, it has a proven track record in product development, scalability, and market competition. Funds from Series B and beyond are generally used to accelerate growth by hiring talent, expanding marketing efforts, enhancing infrastructure, or making strategic acquisitions. Investment amounts can vary, with some rounds breaking records, like OpenAI's $10 billion raise, while others might be smaller than earlier rounds.

At each stage, the requirements for securing funding evolve, and startups need to adjust their approach to meet investor expectations.

Here's a more detailed breakdown of each stage and what they entail:

In Conclusion...

Starting a tech company without prior experience may seem like an impossibly difficult task, but as this guide has shown, it’s actually far from impossible. With the right approach, a strong co-founding team, and a clear understanding of how to take proper advantage of resources like accelerators and various funding options, even first-time entrepreneurs can thrive in the startup ecosystem.

Building a successful startup is a journey that requires persistence, learning, and adaptation, but by moving fasts, learning from others and never settling for your current situation, you can take step after step toward creating something impactful. So, don’t let the lack of experience hold you back; start planning and get ready to turn your vision into reality.