In the early days, startups are very capital-intensive. They don't have a product generating positive cash flow, so they often rely on some outside capital (debt or equity) to grow their top line. This is a necessary evil in the early days to get a company up and running. With the need for capital underscoring the financing strategy for most startups, it's easy to forget that the best companies are companies that don't need capital to grow. An excellent example of this is a franchise like Subway that leverages franchisees' capital to open new stores and expand its footprint. In addition to a franchise model, there are lots of other business models that companies can use to grow without capital:

1/ Preselling or securing customer deposits: getting a customer to pay in advance or fund the development of a product.

2/ Joint ventures and strategic partnerships where a partner provides the capital to grow.

3/ Government grants and contracts.

4/ Revenue sharing and licensing agreements. Getting your own sales team to sell other people's stuff.

5/ Supplier financing. Getting very favorable payment terms from your vendors such that they can use funds elsewhere for some period of time.

6/ Revenue from Licensing Technology or IP: Companies can license their technology or intellectual property to other firms, generating revenue without direct investment.

7/ Network effects. Building a product that’s more valuable as more people use it, so there’s a built-in incentive for customers to market it for you.

Early-stage companies will be inclined to rely on organic growth as they get off the ground. But it's important to incorporate — or at least be thinking about — less capital-intensive growth strategies and business models as the company matures. Again, the best companies out there are those that can achieve high growth rates without a corresponding need for capital investment.