A sales funnel is a model that breaks the customer's path into stages: awareness → interest → trust → decision → purchase. It's called a "funnel" because there are many people at the top and only buyers remain at the bottom.
The funnel is usually split into three layers: TOFU (top — awareness), MOFU (middle — building trust), BOFU (bottom — sales). Each layer needs different content and a different message.
Which stage to start from
It depends on the product and market. In a market where demand already exists (the problem is clear), starting the funnel from the bottom — BOFU, the sales stage — brings results faster. For a new, unfamiliar product you must build trust at the top of the funnel first.
The funnel's weakest link caps the whole result: if the ads are great but the lead-handling system isn't ready, leads arrive and vanish. That's why the funnel is built together with the advertising.