Raising money too soon for a startup creates a number of serious problems.
You get diluted out of your ownership.
You destroy your cap table and follow-on funding becomes complicated to negotiate.
Watch this 2 minute 20 second video to learn how Mark Zuckerberg played the funding game and preserved 26% equity in Facebook.
If you Bootstrap First, Raise Money Later, it will not only improve your odds of getting funded, it will also preserve your ownership and keep your business attractive for follow-on rounds. This video explains further:
And there are some case studies on how scrappy entrepreneurs Bootstrapped First, Raised Money Later and in the process created very successful businesses that any entrepreneur would be proud of:
These entrepreneurs did not waste time bouncing around trying to get funding for a business before it became truly fundable.
A bootstrapped, fundable business with warm introductions is the fastest way to get funded.
We can introduce you to angels and VCs, IF and WHEN your business is fundable and validated.
We can help you negotiate terms that protect your ownership.
And we can also help you get to a fundable state.
There are many landmines that destroy cap tables. Ugly cap tables make businesses unattractive for follow-on investors. And if a business needs follow-on funding but cannot get it because of screwed up cap tables, such a business will die. The founders and the employees will get hurt emotionally and financially.
Try not to get into such a situation.
There is more to funding than meets the eye. The nitty-gritty details of startup funding are far more complex than one can glean from popular media or MBA courses.
Funding is plentiful for fundable businesses.
Let’s get to work, create truly fundable businesses, then negotiate the right cap tables.
Photo credit: Alessio Jacona/Flickr.com.
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