At a time when the measure of startup success is too often linked to the funding they manage to raise, it is important to ask yourself the right questions before starting such an approach. Here are our essentials.
1. Why do I feel I need financing?
If you say to yourself:
- Why not? It’s “free” money.
- This is what startups do.
- We’re not making any money yet, so this is the only option.
You may be heading straight for a brick wall. Financing is not the only option, nor the first one you should consider. In our opinion, you should feel the need to seek capital when you know how to list of slovenia cell phone numbers make money with your business (and can prove it, not just on paper), but the step to get there is too high.
2. Do I really need financing?
You are making money, you are doing well, but you would like to grow faster? Financing may be an option to your telemarketing and lead generation will order an introductory call consider, but there are others. Have you thought about sustainable/organic/slow growth ? Or about making an agreement with your first customers to finance your initial costs? Who better to invest in your project than your users? As a bonus, finding these first customers will allow you to test if you are meeting a real need. We will talk about these concepts again soon in a future post.
You should only need external financing if you are able to generate revenue sustainably, but you can’t reach the next stage because you don’t have the necessary money in the bank. Unless you need a partner who will invest in your business, and not just to make money… As for us, it should never be just about money!
3. How much money do I need? And why?
If you get, for example, the $100,000 you think you need tomorrow, what do you do? Will you be prepared to manage it? Do you have a plan to execute? Have you tested that plan on a small scale? You don’t want to learn the hard way what you should have done with that $100,000 once it’s burned. These are costly mistakes! As the saying goes: lack of resources is the mother of innovation.
4. How much money am I able to generate through financing?
Calculate, calculate, calculate. Sure, business to consumer reviews not everything will go according to your initial plan, but take the time to estimate how much additional money you could generate through financing. Will you be able to make your business economically sustainable, or will you still need financing?
We are not against funding, but it has to be for a good reason. It is easy to get overwhelmed. With big funding comes big responsibility. Ask yourself the right questions!