Monday, 7 January 2013

Why you might not need funding

The typical excuse for any entrepreneur is "I don't have funding". Because money solves everything right?

When it comes to money I see lots of different things entrepreneurs do. Sometimes if there is no money on the table then some startups don't work. They don't do anything, as if the money they are about to receive will change everything. The other things that I see startups do is actually get way too much money. This can't be a bad thing right? Money makes a business go up, right?

Well both of these can actually be really bad. The first is that you should be working on whatever you are doing regardless of what investment capital you have. You can release and promote whatever it is your doing by yourself before you ask for any amount of money.

The second is getting too much money. Sometimes I see really lame ideas get a ton of money for investments. It happens all of the time. The startup feels fantastic because they got some money and they get clout in the startup community.

But what happens if the startup makes no money? As an entrepreneur who sells products, it is very hard to make money. I personally wouldn't accept capital because I have no idea if my idea will make money or not. Nobody knows if your startup will make money in the prototyping phase. You have to test the market first and see what your startup will make before you go and ask for money. That also means testing it more than a couple of months.

Remember: you only get one chance at startup money, if you blow it you're finished. If you get a 100k investment and don't return that, then good luck finding more capital. Perhaps you can coax more investment but at the end of the day is that really useful?

If you want your idea to work, try turning 1-10k into more money. Start with that first and then move on. If you can make that small amount of money make more money with your startup then consider asking for more.

1 comment:

  1. Hey! Its a true, really true!
    I agree! i ever say:

    Work is a thing.
    make money is other ( different ) thing.

    Good luck!

    ReplyDelete

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