Forget outside investors. Here’s the secret of how I funded my company.

Paul Graham, founder Y Combinator which funds startups, said entrepreneurs need to be “relentlessly resourceful,” which made me think of the story of how I got the money to launch my first company.

When I graduated from college I was hell bent on starting a business right away, but I was dirt poor.

One day, I looked at the flood of catalogs that J Crew sent me and was bummed out. I thought to myself, if I hadn’t spent money on clothes at J Crew in college, I might have enough cash to start a business.

But I wasn’t going to give up on my idea. School didn’t teach me much, but in my spare time I read enough biographies of successful entrepreneurs to realize that throughout history, the most successful entrepreneurs started out with nothing. If you’re determined, there’s always a way.

One time, when I looked at a J Crew catalog, I noticed their return policy on the back cover of their catalog. It boasted that their refund policy didn’t have an expiration. Out of curiosity, I called up their customer service number and asked, “would you give me a refund for clothes that I WORE.”

The customer service woman said, “Yes. That’s our policy.”

It seemed too good to be true, so I wanted to make sure. “I bought clothes from you throughout college. I wore them. They’re used. Are you telling me I can return them to you and get a refund check in the mail?”

She said, “Yes. That’s our policy.”

So I boxed up my clothes and sent them back. Within a few weeks, I got a check. I considered it my grubstake and used it to launch my business. There’s always a way.

I would never have come up with that idea, if I hadn’t spent years reading about the resourcefulness of other entrepreneurs. I’m telling you about my experience because I hope it’ll spark some creative idea in you. There’s always a way.

If you have any examples of relentless resourcefulness, share them so we can inspire others.

Click to share this story on Twitter.

  • chiropractic

    Costco loves guys like you Andrew, not. :)

  • Adarsh Pallian

    Tweetizen was funded by 1) Web design jobs I got from and 2) Buying hot show tickets at 10am when they go on sale at ticketmaster and then re-selling it back to them at their new auction site for a 100% profit :-) Works!

  • Olivia

    Very clever. And Adarsh, I love your method too. Great energy in this story and I hope others share their stories.

  • Khuram malik

    Oh, i have a million.

    I did have a little bit of spare cash when i started really early on. This was in 2001.
    Large companies were hiring folk from India for outsourcing, small businesses hadnt quite grasped the idea just yet.

    So i did the next best thing, i hired my aunts next door neighbour in Pakistan, and gave him work over email and skype. Worked out beautifully for me for quite a while because it meant i could provide software to clients at a lower price, or alternatively get it done quicker.

    Separate example. I called a family friend of my father, and asked him for free office space. He set me up with a broadband connection, a telephone and i got 2 free desks.
    In return i offered to give him 4 hours of IT support a week. Genius :)

  • AndrewWarner

    If I were bootstrapping a company now, there's no way I would pay Costco for a membership. I'd find someone in the parking lot who'd let me use their card to shop.

  • AndrewWarner

    I met you through my interview with Tim Sykes. I think he told me that you redesigned his site in exchange for a percentage of profits or revenue. I think you have a bunch of great bootstrapping stories in you.

  • AndrewWarner

    Thanks Olivia.

  • AndrewWarner

    Love those examples Khuram! Meanwhile, I can't tell you how many people I see waste money on office space. It's a large fixed cost to carry around. I'm not judging because I did that once too. Huge space in mid-town. Painful. Your approach is better.

  • Liam Rose

    Great story – in these tough times it can seem impossible to find the money needed to start your own thing. I've also heard that most people follow the money instead of following their dream and the ironic part of it is that if you follow your dreams you usually end up doing better in the long run and therefore the money follows you! That having been said, I think it takes a special person to take that leap of faith. Thanks for sharing Andrew.

  • AndrewWarner

    Sometimes I feel like entrepreneurship is the lesser of two pains for me.

    After I cashed in my chips and took a break, I worried about starting something new. I didn't want to risk going back to poverty. But I decided that the bigger risk for me was living a life where I didn't try to do what I wanted.

    I thought about what that kind of future might be and realized I would be too depressed.

  • chiropractic

    Good smack in the face answer. I started thinking of all the “useless” memberships I have (both online and off). Not bootstrapping but no point in being wasteful either.

  • Dig for Leadership

    What a stellar story – how cheeky!!!

  • Liam Rose

    Makes sense to me. I think that internal drive is something you are just born with or you aren't.

  • AndrewWarner

    I can't believe they allowed me to do that.

  • AndrewWarner

    I wonder that sometimes too. But I've also spent time with musicians and found myself thinking, “I should really learn an instrument.” Maybe it's who you're surrounded by.

    Reading about all those entrepreneurs must have implanted some kind of drive in me.

  • Daryll Strauss

    It's a great story, and I'm sure that your first business was great for your career.

    But frankly, I find what you did unsavoury. I'm sure their policy stated something like “if you are unsatisfied with your product for any reason you may return it for a full refund at any time.” You clearly weren't unsatisfied with the products. You'll also notice that now they no longer offer refunds for an unlimited period. For defective merchandise you can get a refund for the first 60 days and after that you get store credit.

    Good customer service is critical to running a business. You put up with people making bogus claims because you want to treat your customers well and hope they'll do more business with you in the future, but every time someone abuses the system it costs the business. Good customers pay for those costs or the business fails.

    If you had told me you gave up wearing J Crew during college and saved the money I would have been impressed. If you told me you took an extra job flipping burgers to raise the money I would have been impressed. This story makes it look like you're just in it for yourself and you don't care who else you hurt to get what you want.

  • AndrewWarner

    I understand Daryll. I'm not 100% sure it was the best approach.

    If I told you that I was flipping burgers in college and saving my pennies, you would have been impressed, but then I'd be feeding you the same fairy tales about business that the self-help movement is shoveling at us.

    I want to be open and honest.

    I was upfront with J Crew. I didn't sow labels back on clothes and pretend they were new. I got their permission before I got their check.

  • wolfsbayne

    as long as u weren't sending back ur used panties for cash, what's the problem?

  • Daryll Strauss

    Maybe you had a bigger wardrobe budget in college than I did. :)

    I think the message of “do anything” to raise the money is just as bad as the self help books. If you start your business with that attitude you're likely to continue it, and that's not good for your business or it's customers.

    It takes hard work. It takes sacrifice. Anyone who thinks they're going to avoid that is likely to fail or be someone customers shouldn't be doing business with.

    Overall, I read your blog and like your advice. I hope we get a chance to meet at some event in LA. Everyone makes mistakes, and sometimes we get to learn from them. In this case, I think this was a mistake, rather than an approach to be lauded and emulated.

  • boogah

    Nordstrom actually has a similar policy and leaves it up to their employees to use their best judgement when issuing a refund. It might not be the best approach to fund a company that way, but think about the artists who have bought studio time with money gained thru even more illicit activity.

    You did what you needed to in order to get ahead and chase your dream. I don't think that's wrong at all. Of course some would argue differently…

  • AndrewWarner

    I bought a lot because I kept wanting to look like the people in the catalog. I kept thinking I was just one jacket away.

    Yeah, I'd love to get together Daryll.

  • AndrewWarner

    Thanks Boogah. I can see the benefits of all this openness, but it also feels strange to have things out in the open.

  • AndrewWarner

    Nah, saving those in case I ever go bankrupt and need some cash to start over.

    Thanks for the note buddy.

  • Ben Fremer

    Without seeing the TOS, there's really no way to know, and I think he would have to have known he was violating the TOS or be recommending breaking a TOS to others to call it unsavoury.

    Often in business you really can't know if a good deal for you is also a good deal for the person you are trading with or not. Maybe they sold the old clothes at a markup to retro collectors.

  • AndrewWarner

    Thanks Ben. By the way, I love that we met on this site and then met in person at the UGCX conference.

  • Ask Bjørn Hansen

    Yeah – at my first company in Denmark we started in a similar way. Got office space, money for a fancy 512kbit/sec internet connection (hey, that was fast in ~12 years ago!) and they bought us our state of the art macs to work on.

    In return we gave them consulting and web development work for heavily discounted rates until we were established enough to find space on our own.

  • AndrewWarner

    Smart Ask.

    I wish I'd thought of that back when I signed my 10-year lease in New York.

  • Deep Patel

    that's a creative way to raise money. Jcrew should of had their return policy in check, can't blame Andrew if he asked and they gladly accepted his returned merchandise for cash. Maybe an alternative way is holding a garage sale or selling old stuff on ebay to raise cash?

    Personally I got our business off the ground with savings and used some of my student loan money. At the very early stage when I would run into cash issues, ebay was a good place to get rid of old stuff and use the funds as operating capital.

  • Jim

    So I'm the only one that finds that a pretty scummy thing to do? I don't even know what J-Crew is (other than from this article) but even though certain types can take advantage of a return policy like that I'm sure the intention is to provide good service to someone that for some reason is unhappy with their purchase (quality issues) – not free clothing.

    And then you posted this on the Internet as a warning to others to not do business with you!

  • EricSusch

    I'm curious. How much was the check you got back from J. Crew?

  • AndrewWarner

    You're not the only one. I'm glad you feel open enough to say that here.

  • AndrewWarner

    I don't remember. I think it was $500 – $1,200. Wish I remembered more. Actually, I wish I had a framed copy of that check.

  • Brandon Croft

    I can't believe what a douchebag your face is.

  • Brandon Croft

    Meaning I can't believe you're gloating about taking advantage of what we normal people like to call the honor system.

  • caligula

    Clever, but douchey.

  • Brennan Smith

    Can we all come to agreement that the topic here is creativity & resourcefulness? Andrew did what he did way back then, and he was up front with them about it.

    More importantly – let's share our creativity and answer the question, which if you ask me is: “How bad do you want it?”

    Despite wanting success really, really badly, eEven Andrew has recognized that he wouldn't go that same route today, and it's obvious that he now believes in collaboration. So the secondary question, within reason, is: “How resourceful are you willing to get in order to make it happen?”

    In my case I was the guy who DID offer my web tech a percentage share of the company in order to keep up-front costs lower.

    Then I started making calls to see who could use MY skill set on a part-time basis (so that I'd still have time to build my site).

    Then I started listening to Mixergy and Venture Voice religiously.

    Then I started wondering what you did to be successful, because I want to learn from it. So . . . tell us . . . because I, for one, am all ears.

    Thanks for a stimulating discussion, Andrew.

  • AndrewWarner

    I understand how you feel Brandon. I'm glad you feel comfortable enough to say that here.

  • AndrewWarner

    Brennan, that's a great example.

    Also, I clicked over to your site,, as I usually do when someone leaves a comment, and now when I do an interview, I'm going to keep it mind and see if I can drive the conversation in a way that will help your site.

    I need to make those interviews practical.

  • AndrewWarner

    I remember how surprised I was when my student loan check came right to me. It was made out to my name and everything. I always wondered if I could use it to start a company. Interesting to see that it's possible.

  • Yoav

    That's hilarious and oddly inspiring. I wonder though if that policy resulted in an overall gain or loss for J Crew. The amount of people that actually read or heard about the policy and had an added sense of security and purchased more based on that security vs. the cost of having to sell, then absorbe and resell? those items. Still going through your interviews so you might have already, but It would be interesting to hear a breakdown of how much of a priority company image should be, and when investments should be made in creating that image.

  • michele

    this was a GREAT post…. very relevant for me re: a couple of projects i am working on…..”can't say what they are though!!”…… just kidding— really helpful.

    also, very timely as a lot of great ideas & start ups are swirling to the surface in this economy of opportunity

    thanx for posting

  • michele

    ha..ha… lol….. resourceful & cheeky!!

  • AndrewWarner

    Thanks. After I posted this, a few entrepreneurs called and emailed me to
    say, “you think that's something, wait till you hear my story….” But they
    wouldn't let me post their stories online. Too bad. I think there's a lot to
    learn from the resourcefulness of other entrepreneurs. Even if we don't copy
    them, we can adapt some of their ideas.

  • Andrew

    I started an Amway business to fund all of my business pleasures. I'm surprised how much negative there is out there about it but I did it and it worked amazingly well. I also so an interview with Donald Trump and they asked him how he would have made his start up money for his real estate empire and he said Amway. Andrew I send your sister an email telling her about the new worldwide Amway group that her and Keith could use to generate some awesome results from with their digital loyalty network. What are your thoughts on that?

  • AndrewWarner

    I'm pretty down on all MLM companies. But that's why I think we need a mix
    of entrepreneurs to share their stories. Each one has a different set of
    experiences. If you only listen to one you can't possibly get a complete

    As for my sister getting into Amway, I'm against it. Professionally, she
    should only do what helps her grow in her business. Even if Amway is a great
    way to bring in money, it's not going to help her grow professionally as
    much as focusing on her own business would.

    2009/3/13 Disqus <>

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  • paul foh

    wow! andrew that was very creative of you. but it won't work in nigeria where i live.

  • Jim

    Probably good you don't, J Crew might ask for equity. ;)

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  • AZ Start-Up

    Andrew, I for one believe that what you did was extremely ingenious and resourceful. The person above, OBVIOUSLY, has no IDEA what they are talking about for the following reasons:
    1) they don't realize that a company's RETURN POLICY is created to take into consideration a customers issue; the writers of the policy obviously anticipated/implied reasons OTHER THAN customer dissatisfaction if they DIDN'T include all the others within their policy. When someone says “That's our policy!”, they mean “We don't care WHAT your reason is, we will take it back!”
    2) the person should not deal in business or entrepreneurial websites, if they are not enterprising enough to check out who J.CREW is BEFORE commenting about them; it seems like you would need to be hidden in the Arctic to NOT know about J.CREW. I would surmise that their taste in fashion matches their competence and level of knowledge.
    3) they seem to have NO IDEA what it is like to do a start-up with no seed money. Maybe they were fortunate enough to partake of the 'silver spoon”, but not everyone is. They are simply confusing the entrepreneurial spirit, with their misguided sense of misplaced ethics. It's good that they are trying, but it clearly seems that their “hammer” missed the “nail” by a “couple of yards!”
    Thank you for sharing your experience Andrew and please continue your good work.
    – AZ Start-Up

  • mkrawse


    Great post… very informative and even more entertaining. I agree that being “relentlessly resourceful” is the key to success. If you want it, it's yours! Entrepreneurs just have to be willing to put in the time/effort, the sweat/tears, and all the other great things that come along with the ride.

    Relentless, Persistent, Driven, Determined… whatever word you want to use is the “make or break” for an entrepreneur. Mix that with a little creativity… and you have gold.

    Thank you for sharing your story! It was inspiring!

    – Matthew Krawse

    P.S. Too bad that JCrew doesn't still have that return policy! That was awesome!

  • mofey

    Well, now JCrew is getting so much more out of that incident! It's that kind of service that builds up a brand. Kind of like the Zappos story Seth Godin told at one of his presentations.

  • AndrewWarner

    From what I understand, they're not upset with this.
    Thanks for the comment.

  • Mark

    What was the name of your company (the one with 30+ mil in annual sales) and what did it do?

  • Andrew Warner

    Bradford & Reed

    I have more posts here about it, including some financial statements.

  • Hameedullah Khan

    No doubt, You are genious!

  • Hameedullah Khan

    Andrew!! Thanks for motivating me yet once again. There is always a way.

  • timothysykes

    Bed Bath & Beyond has the same kind of dumbass policy, you can bring in old receipts and use their 20% off coupons to get cash back for eternity

  • Arthur Cundy

    Great story Andrew! It gave me some things to think about going forward. And it's true when you want something bad enough and are passionate about it, you'll find a way to make it work. I call it being shrewd.

  • thereviewguy

    Love the J-Crew story although I can never pull that off.

  • thereviewguy

    Love the J-Crew story although I can never pull that off.

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