Are You Sure You Really Need To Raise Money?
I believe a lot of people don't really know why they want to raise VC money�…other than ego.
I was reminded earlier today of a past business associate that was in a fever to raise money for his enterprise software company. They desperately wanted to raise $8-10M to fund "the next level" of growth. I asked him what he planned to do with the money and the answers were mostly building more infrastructure – offices, staff, facilities, etc.
At the time they had a working product and no customers to speak of.
His face went blank when I suggested instead of working so hard to raise money he should put a plan in place to go get paying customers. Why borrow money if you can make it? Make the business profitable, take home real money your family can spend, and not worry about the ego of being a VC holding.
This formula doesn't work for some�…it will for many.
Do you know of a company that focused on raising money to the point they failed to operate their business?
Business Deals | Jim Logan | 11 October 2005 |
