Creating your Startup? Need funding?
Consider this before…
The first question that comes to mind when an entrepreneur think about launching a new business is : HOW WILL YOU FIND IT?
I purposely capitalized the letters, not to indicate those questions usually comes in a LOUD voice tone, because most of the time they do not, but to reflect their impact on the listener.
And guess what? The first persona usually posing those questions are the entrepreneurs themselves. This is critical as it tend to divert attention from what is more important to what is less important.
Funding is a mean
remember, the right way to start thinking about funding is that it is a mean. A mean towards materializing our project. Funding is ONE of the means.
When entrepreneurs rush to think about funding they omit all the steps before that and by that they are missing many opportunities.
Think about it from a ‘lover’ perspective. When you fall in love for someone you do not think how you will secure flowers, phone calls, words, and good nights with that person. You think: I want to impress, to love, to please, to satisfy that person. I will be happier if things work out and i will do whatever it takes to make things work out. The means are there or to be created towards that -first- destination in a long trip. Same with funding.
This is why raising money should not be your first nor the second nor the third concern. In fact, by being so obsessed about how to raise money for your project you are really -really- engaging yourself in two types of new challenges that you’d be better off them.
- Tailoring your project to fit the size, taste, and preferences of the potential investor.
- Driving yourself away from what should be your first, and second and third center of attention — Your Customers/Users/Candidates… — .
- And committing yourself to growth targets that will add huge new types of stress to your already existing ones.
See? not necessarily good. You will never be enough.
So think before you seek investments :
- Do you REALLY need that funding ?
- What EXACTLY for?
- What ALTERNATIVE solutions can be out there? In-Kind Services? Loans? Sponsorship? Donations? Steal? (Please ignore that last one, it was just my sick sub-conscious speaking out loudly).Point is, go wild with your imagination.
Do not rush for funding. I remember a couple of years, i wanted to launch a t-shirt brand with embedding media-tech in that solution. Two friends loved the idea and proposed two five digits funding each. Another friend was enthusiastic and supportive enough to suggest possible accessibility to facilitated bank-loan. I turned away all of that. Why? It felt too much responsibility for a product that is not well-thought enough yet. Other people tend to accept that, either because they are more clever or because they are stupid. The idea is not to RUSH to raise up money. Trust me, If you have a good and viable business idea, you will get the money you want. Why?
Because people with money want to invest their money. Simple.
If we agree that funding is a mean towards a bigger and more sustainable endS, then let us think about other possibilities than just giving equity in your startup — which means necessarily and explicitly accepting someone else to interfere in your goals and values.
Accelerators and Incubators:
I elaborate on this in other blog but this tend to be a very working option. The main point here that you do not want to miss is: What are they offering EXACTLY?
There are plenty of them out there and they tend to over-promise so be smart.
This is my best option. A co-founder will take a big portion of the cake but she/he will be there MAKING it with you. They are not here to invest, wait, exit with profit. They are here to grow. They love this. It is there business as much as it is yours and they are giving it all their potentials. So SEEK. SERIOUSLY. SMARTLY. a good co-founder. You can read further about this in other blog.
What i suggest is that you go with them in a vesting way.
Read about vesting here.
Get yourself advisory board.
Investors will want that. Advisors are good. They will give advises and they will be really having an external look. They are not fully engaged so they will not get lost in the details. They have the wider picture. Also bring them in via proper vesting schedule. Do not let anyone giving life to your business out. Do not be greedy. 0.2% to 1% of your business for each advisor vested over 4 years would be a fair deal.
If you are creating your startup do not let raising the money become your worrying question. There are many possibilities out there.
You are a founder . Passion brought you here . Keep going . Do not let the funding question prohibit you.