There is so much focus on VC funding, I would like to discuss the other options for capital and the cost of these capital sources versus venture capital.
I would prioritize as follows based on cost of capital and impact of that capital on how one can run the business:
Customer pre-payment. In some cases you can get many clients to pre-pay for future discounts or other benefits. One client may be willing to fund development if they can have a strong say in the requirements.
Cash flow from the business. If you can generate operating profit from the business early on.
Self-fund. Use your own money to bootstrap your startup.
Credit cards. Access to capital is quick but interest rates can be steep.
Friends & family. Access to capital is relatively quick and terms are reasonable. Downside is with relationships if startup fails.
Business plan competitions. There are more business plan competitions than ever and some of the monetary prizes are meaningful.
Small Business grants. Can be very good source of financing if available for your type of startup. Can take a long time to close.
Loans or lines of credit. Reasonable terms. Banks may ask for your home as collateral.
Equity crowdfunding. Still evolving. Worth exploring the growing set of options.
Angel investors. Another option for initial funding. Usually better terms than with VCs. Can be difficult to get if you do not have a network of contacts.
Venture Capital. Best for later stages when you want to accelerate growth. Cost of capital is high. VCs are looking for a payout in five years or so either through acquisition or IPO.
Venture debt. Most often available for later stage companies. An alternative to giving up equity.
I would add cash flow from the business, business competitions, and venture debt
Good additions. I have edited my original reply to include these.