How To Raise Cash Money … or Not
“This post has some basic advice on how to plan your raise before you hit the road.”
In the world of silly apps and man-boy hoodies, fundraising has become a badge of honor.
If you can convince investors to give you money, the thinking goes, you must be legitimate.
Sure, fundraising is essential for some companies, namely high-growth technology startups. Founders can use venture funds to scale the team, secure office space, build out technology infrastructure, and accelerate overall growth.
The goal of fundraising is to get you to the next round. Everything — amount, metrics, story — should be center around the distance between milestone one and milestone two.
Suster has six points of advice for founders entering their raise:
- Create a list
- Stack rank opportunities
- Qualify, qualify, qualify
- Know the firm but also know the partnership
- Research whom the partner knows both for an introduction as well as for back-channeling
- Follow up. Be humble, sit down
If you are going to raise, follow Suster’s advice.
But make that decision strategically.
As the team at Indie VC (a firm with excellent brand positioning) makes clear, fundraising is not for everyone.
You can build an incredible company without venture funding.
Indeed, I would argue that living or dying off cash flow — making something and selling it for a profit — is the best, most sustainable form of business.