Recently I’ve fielded a few E-mails with regard to getting an enterprise funded via VC or Angel Money and I thought the topic of funding a start-up is very worth while.
At current, the investment climate is taking a stronger position on M&A and late term businesses that are showing higher prospects of return (More here). In my opinion this is a good thing as it paints a very clear picture for the business world. If you are not capable of making money in the near term, you’re not worth investing dollars in right now.
Lets all step back a few years to an era that is now know as the Dot Bomb. Remember all those great dotcom ideas, yeah there were some good ones- but a majority lacked any form of execution and resulted in billions of dollars being lost for good. To be honest, it was a great thing as it reminded people that not every great idea is all that great. Without execution, an idea will remain an idea.
This all brings me to my point. If you are an entrepreneur, the absolute last thing that you should be doing is asking everyone for money until you know darn well that you can build what you say you can. Furthermore, build it and prove on some scale that it works before you ask anyone for any money other than your own. There is a big difference between idea guys and execution guys, so tread lightly until you know you’ve got something. Once you’ve got something, don’t ask for a million bucks unless you know for sure that it’s what you need. My advice would be to seek out an expert in funding a business well in advance of asking for a dime.
Simply put, “Money is not necessarily the solution to a problem, and can in fact be fuel for a fire. When seeking funding, know in fact that you need it, what you need it for, and who you need it from”! Investment money is for scaling, not for building the next Google”.
