1. A startup raises early funds from private investors (often in exchange for equity stakes) to form their company. Typically, these investors are friends, family, acquaintances of the founders & the money raised covers the basics – operating expenses, product development, team payroll, rent, equipment etc.
2. Founders collect magic beans and get to work planting them in hopes of growing a mega, giant beanstalk... which also is a tech startup.
Example sentence: Did you know that SunSipz raised theirentirely from their Berkley dorm-mates? Absurdity…