You Don’t Need Investment to Start a Successful Company
Four wrong reasons to seek venture capital and what to do instead
A lot of advisor-type people will tell an entrepreneur that their startup is either investable or it isn’t, with no middle ground. Experience has taught me that there is always middle ground when it comes to seeking investment.
Startup is full of these chicken-and-egg paradoxes. A couple of years ago, I wrote a post titled You Need $250,000 To Start a Company. The clever twist (debatable) was that I didn’t peg outside investment as the only source of that $250K.
I’ve been building startups and helping build startups for over 20 years. And while I work for startups that have raised outside money, and I advise startups that have raised outside money, these days I don’t even go after an investment on my own unless I can prove, with revenue, that the idea doesn’t need investment to be viable. Chicken and egg.
Very few early-stage ventures get funded, and when they do, it’s usually due to an underlying factor, like a previously successful management team or some viral phenomenon that investors are trying to exploit to capitalize on a reward with (seemingly) less risk than usual.
