As a veteran of four startups (and working on #5 now), I am frequently asked about fund raising.  But rarely am I asked about how to make funds go further.  In reality, every dollar not spent is more than equal to a dollar raised (you are not giving away any equity).  Most startups don't shoot for the moon and most don't need to spend as fast as they do.  In fact, there is often pressure from investors to spend, spend, spend.  Beware.  Your startup, if it is successful, will most likely take twice as long and cost twice as much money as you think.  Investors are often willing to put in more money, but that's you hard-earned equity that you see going out the door unnecessarily.

So what are the best ways to save money?

- Don’t draw a salary.  And don’t hire people who draw salaries if at all possible.  (this sounds obvious, but if you can do it, this plan will greatly prolong your pre-funding capabilities and get you much further along before dilution.

- Don’t rent.  Consider using someone’s house, basement, or garage.  Or find a friend with a company who might allow you to use a room or two in the back to work out of.  If you have to rent, pack ‘em in like sardines.  Space is not a luxury for a startup.  Go cheap, too.  Get space in a warehouse or in a non-premium part of town.  Rent over a restaurant.  You get the idea.

- Buy cheap IT.  Don’t get fancy multimedia laptops.  Go cheap.  Get ones that work.  Consider buying used.  Better yet, many of your co-founders and early employees nowadays have their own laptops, so use them.  Consider leased servers and many of the free or cheap Web-based storage and collaboration tools.  By using services monthly, you avoid the high cash payments up front.

- Don’t spend on infrastructure.  You probably don’t need expensive land lines for phones…just use cell phones.  Besides, land lines take weeks or months to set up, and a cell number can be up and running in about 30 minutes just about anywhere.  Do you really need the smoking hot T1 line?  Or can you make do with a wireless modem for now?  In the early stages, find out where the free wifi spots are and use them. (Hint: Panera!).  Don’t put in nice desks, either.  Got a used one at home?  Or buy one on Craig’s list.  Ikea has cheap stuff that looks nice and holds up okay.  Or get some used doors and slap them on sawhorses (hey, it works!).

- Watch the marketing.  You can blow a LOT of money on marketing very quickly, so before you spend, test, test, test.  Only spend real money on things that really work.

- Be a miser every day.  Team building can be a soccer or basketball game every Friday (ball = $12.95) instead of paintball or a cruise.  Travel coach, always.  You get the idea.

Every dollar you save at this early stage allows you to exist a little longer before you need either outside funding or enough self-generated cash flow to grow.  Save at every opportunity – you’ll be glad you did.