Does It Take Money to Make Money?

My kid brother and I are both entrepreneurs. However, we’re very different in the way that we approach business. A fundamental difference between us is that he wants to start a business with a lot of startup capital from investors so that he can get in at the top level of the business as quickly as possible. In contrast, I prefer to invest as little money as possible in a business while exploring whether or not it’s what I really want to do. Either approach is fine for starting a business as long as you know why you feel the way that you do.

Thinking about this topic has brought up an interesting question for me – does it take money to make money? Ultimately, despite the fact that I approach the initial startup of a business different from my brother, I do believe that it takes money to make money. This doesn’t mean that you can’t start a business with no money but it does mean that I believe you have to re-invest your immediate earnings into the business if you want it to actually get off the ground.

What do you think? Does it take startup capital to make a business work or does a gradual process of starting with what you have and then re-investing regularly in the business work just as well?